Dear Debt Adviser: My sister-in-law has asked us to borrow $5,000 to pay her credit card bill. She told us that the credit card company won't accept monthly payments of $100 and are going to foreclose on her house if she doesn't pay the full amount. This doesn't sound right to me. Credit card companies are usually willing to make arrangement for payment. Can such companies foreclose on your home? Kathy

Dear Kathy: The simple answer to your question: No. In general, a credit card company cannot foreclose on a home. If the company is truly threatening your sister-in-law with foreclosure of her home, then she should let it know that threatening an action that it is not seriously going to pursue is not allowed and is a violation of the Fair Debt Collection Practices Act.

The company may well be asking for a payment larger than $100 a month. At some point in a delinquent account's life, the entire balance of the card becomes due and payable. This includes all the late fees, over-limit fees, interest charges, legal fees and any other fees that may apply. Many people are shocked to find that they actually have to pay the entire balance if they default, and think that the credit card companies will just wait forever for their money. Some may find your in-law's naivete charming, but lenders don't.

Before we get to the crux of the matter should you loan the sister-in-law the money and what the credit card company can do to collect I suggest that you precondition anything with having her first get to a good credit counselor for an analysis of her situation and a review of her options.

She can find help through the Association of Independent Consumer Credit Counseling Agencies, 866-703-8787, or the National Foundation for Credit Counseling, 800-388-2227. I will be very surprised if they recommend that she take a loan from a family member, assuming that she is gainfully employed and really only owes $5,000. My experience is that there is a lot more going on here than you know ... and you don't want to know it.

As to what the credit card company can do to her, here's the usual process. For the first 180 days, the account will be in what I'll call normal collections. Letters, phone calls and the like are typical. After 180 days, the account charges off. She still owes the money, but the debt is considered a bad debt for accounting purposes. Her credit report gets scorched and the collection activity may move to an outside firm or an attorney.

Eventually, she may get a summons to court, and the court will be asked to issue a judgment in favor of the lender. If it goes further, then we get to wage garnisheeing, liens on property and the like. All the time the fees are adding up and the bill is getting bigger and her credit score is getting smaller.

A judgment lien, rather than foreclosure, may be what the credit company is threatening.

Back to the request for a loan. This is a really bad idea on so many levels that I generally suggest that if you feel you must do something and you can afford it, you should just make her a one-time-only gift of the money.

A loan between family members strains the relationship greatly, ruins holiday get-togethers, sets you up to be the unsympathetic bad guy if she doesn't pay it back (after all, you are lucky/rich/more fortunate/better-looking/Mom's favorite, so why are you asking for money from this poor lady?), and the list goes on.

I think that a referral to a credit counselor along with some moral support and understanding will go a lot further to help matters than throwing some money away.

Good luck!

Steve Bucci is president of Money Management International Financial Education Foundation. Visit http://www.moneymanagement.org for additional debt advice.