13 Mar Our adult son signed up for debt relief. How can we learn more?

Q. Our 36-year-old son is once again “back home” and living in our New Jersey basement. He is on Social Security Disability — $2,000 monthly — and he’s divorced and financially irresponsible. He drives and one day hopefully one day may decide to get a job. This return home follows a one-year stint in another state with a group of “friends.” Because he had a good credit score (thanks to my wife!) his friends convinced him to take out four credit cards in order to have a six-month long party. Bottom line: $14,000 of debt. The “friends” then convinced him to consolidate with a debt company. Can you weigh in on this mess? We don’t understand how these debt companies work.
— Concerned parent

A. Boy, this is a problem for your son.

He’s very lucky that you’re trying to see how you can help, and understanding exactly what he’s agreed to with the company is key.

It sounds like he’s already signed on with the company. You would need his cooperation to share with you what the company has promised, what documents he has signed and how it’s all supposed to work. Ask him to share it all, or perhaps he would have a call — including you — with the company so it can all be explained for you.

Before anyone enters into an agreement with a credit consolidator, there are free options that should be exhausted first, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge.

First, call the credit card companies.

“Creditors may offer a hardship plan by lowering the interest rate, waiving fees or creating a payment plan, she said. “You might also be able to negotiate a payoff or debt settlement that would reduce the amount he owes.”

If you are successful, insist on receiving a written agreement that spells out the details of the plan, she said.

The next step is to contact a non-profit credit counselling organization.

Before paying a company to work on debt relief, you could reach out to one of the non-profits that helps consumers with debt management plans, she said.

“These companies will not negotiate to lower the balance that you owe, but they will work on lowering interest rates and work on repayment plans with creditors,” she said.

These include the National Foundation for Credit Counseling, Financial Counselling Association of America and Money Management International.

There are also debt settlement companies, which are for-profit organizations that work with consumers to negotiate reductions in credit card debt.

“Typically, their fee is between 15 to 25% of the debt in the program,” Mott said. “They require the consumer to stop paying the credit card companies and send the payments to a savings account at their organization.”

The company will then negotiate with the creditors on the consumer’s behalf to reduce the amount of debt owed, and the process can take from two to four years, Mott said.

“Once a settlement is reached, the amount owed and their fee are paid from the savings that have accrued in your account,” she said. “This method can take a serious toll on a credit rating because payments have been stopped and the credit card companies are going to report this to Experian, Transunion and Equifax.”

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This story was originally published in March 2026. 

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.