Research on interpersonal trauma tends to focus on the effects of traumatic encounters on those one who directly undergo the experience. In this paper, I seek to understand the experiences of the friends and family of the one who has undergone trauma, a paradigmatic case being the relatives of veterans (O’Nell, 1999). I argue that one way we can understand the experiences of friends and relatives is through Pauline Boss’ concept of ambiguous loss (Boss, 1986, 2007). The kind of ambiguous loss relevant for our purposes is when a family member is physically present but psychologically absent, for example, in the case of a relative with advanced dementia. This is what I purport happens in some instances of traumatic experience. I argue that third-person traumatic encounter can be experienced as a loss due to the changes in the person who has undergone the traumatic encounter and that this, in turn, causes changes in the person experiencing the loss and their relationship with their traumatised family member. I argue that first-person traumatic encounter is a transformative experience (Paul, 2014), i.e., an experience which causes personal and epistemic changes in the subject undergoing it, and that third-person traumatic encounter can also be a transformative experience.