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I'm 27. I let my parents borrow my credit card five years ago and they haven't kept up with the payments. I don't have a job and can't pay the amount that I owe. What should I do?

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    Question: I'm 27. I let my parents borrow my credit card five years ago and they haven't kept up with the payments. I don't have a job and can't pay the amount that I owe. What should I do?

    Answer: First of all, I feel for you. I did something similar when I was 23 with one of my relatives, and I was probably in my mid-30s when the credit card was finally paid off. As you've clearly found out the hard way, using your own credit card to lend money to anyone, including your best friend, your parents or even your sick grandmother, is both incredibly thoughtful and incredibly risky.

    There's no easy solution, but here are the steps I would suggest, best case to worst case:

    1. Have "the talk" with your parents

    Make sure your parents are fully aware that their lack of payment is affecting YOUR financial health and your ability to get credit in the future. Brainstorm with them about how to resolve this unpaid debt. In the best possible scenario, they'd be able to open up their own credit card and do a balance transfer to get the debt off your card. Naturally, if they have their own troubles, they may not be able to do any of this. I'm assuming you had a verbal agreement with your parents, which means you have no real legal recourse.

    2. Credit counseling

    If all that fails and you're left to resolve this debt on your own, contact your local or regional chapter of the National Foundation for Credit Counseling (http://www.nfcc.org). If you have enough saved that you might be able to handle smaller payments for a short period while you look for employment, the NFCC can help talk to your credit card issuer and work out some sort of payment plan.

    Working with a credit counseling agency will negatively affect your credit score, unfortunately. In some ways, it's unfair because you're trying to do the responsible thing and here your score takes a hit, but a lender rightfully sees it as a sign you have financial problems (which you do), and thus your score goes down. But not working with a credit counseling service and having numerous missed and late payments means your credit score is plummeting as well. So working with a credit counseling agency versus going with the status quo is the better way to go.

    3. If all else fails…

    If getting on a payment plan isn't an option, then they can put you in touch with--and this is the last thing I'm sure you want to hear--a bankruptcy attorney. I know that sounds like the end of your financial life, but it's really not. It'll be a new start, and eventually, when you're ready, you can start clawing your way back up the credit score ladder by getting a secured credit card. That's not ideal, but with time and good credit habits you can repair your credit history, and hopefully repair your relationship with your parents as well. Good luck.

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