I'm curious about how your book could never be published? Is this because there'd be a chance of legal action being taken against you, or because you'd potentially offend a large number of your friends? Is there no way you can alter the story, change names/situations etc to "protect the innocent"
It's not so much legal action, it's that I'd be, well, writing about my own family and other people surrounding me. Changing the names wouldn't make much of a difference. The story would of course be fictionalized and altered a bit, but that's part of the problem. There'd be enough truth in it for them to recognize themselves, but enough fiction for them to possibly be offended.
Fictionalize.

Set it in some SF or Fantasy universe so nobody will recognize it. Or write it as a humorous satire, like a roast.
I don't do SF or Fantasy. I barely even read SF or Fantasy!
As someone else said, fictionalize it. But don't lose the "meat" of the story. You could do as little as changing the names, places, and timeline, or you could interpret the themes you want to present through an entirely different lens while retaining the message you want to get across.
I, personally, don't worry about offending anyone. If they don't like it, nobody's making them read it.
Haha I, on the other hand, worry about offending everyone.
I suppose I should be a bit less vague, but I'm really insecure about my writing so the following that I write here is more than I've ever really told anyone.
I've grown up in America as the daughter of immigrants. I could write a book on the cultural issues alone. I've tried a little bit here and there over the years, but I think I've always known that the best way to frame the story would be to focus on the relationship between my sister and I. It sounds so flat when I type it here. But I know that I have something that could be interesting.
Have you ever felt that you had a story, or characters, that write themselves? I feel like I've kept this story from being written for awhile now, and each year that goes by, the need for it grows a bit stronger. Sometimes I wonder if it's my Bengali literary inheritance that can't go ignored.
I worry about offending my family, and I worry about offending my sister. The worst part is, my sister has always had undying faith in my writing abilities and has pushed me more than anyone else to write a novel. She just doesn't know that it would have to end up being partially about her! And no, talking to her about it simply is not an option right now.
I supposed I should just sit down and write, and worry about all the rest if I ever finish. But that is difficult to do.