I get questions from my database all of the time about what to do in this situation or that. Here’s a simple one from a person who has a relative in a bit of a bind…

EMAIL:

Hi Elisabeth –

Can you recommend a reputable debt counseling service? A family member has about double the credit card debt they can handle and is looking to cut the montlhly payments in half if possible…

Thank you!

MY ANSWER TO THE PERSON:

I have talked to several credit card and debt experts over the past couple of years. From what I have learned, it is actually better for whoever it is to go directly to the credit card company and tell them that they can not handle the payments or interest or both.

They generally send that person to a ‘special’ department (let’s call it the “Let’s Make a Deal” department) and that department’s job is to help negotiate a better payback situation for the customer.

If the relative hasn’t paid on the account in a bit, then it may be even better because after a few months in collections, they are willing to deal.