Q: I’m trying to help a friend who has $25,000 in credit card debt. Due to his occupation, he does not have a guaranteed regular income – but managed to buy a modest town home worth approximately $60,000.

My friend now wants to consolidate all his loans into one big loan, preferably at a reasonable interest rate.

He looked into a debt management program and found out that while his debt is being paid off, his credit would be trashed. He doesn’t want to risk doing further damage to his credit history.

More importantly, he is planning on looking for a new job with a more reliable paycheck.

I want to help and am considering co-signing a loan so he can get a decent interest rate. But I don’t want my credit history to suffer or be burdened with the full amount, if he fails to make a payment.

What’s the best strategy?

A: You want to have your cake and eat it too, but that isn’t going to happen here. There’s no way I know of for you to co-sign a loan for your friend and not be fully responsible if the debt goes bad.

Instead, look for other ways to help. You can offer an interest-free second mortgage on his home (and make sure you record this mortgage, which an attorney should draft, so you have a lien on the home). But as a second mortgage, you would stand in line behind the primary lender should your friend default. Another way to help would be to offer to make some of the debt payments.

But I’d be very careful before you co-sign anything for this friend.

Feb. 28, 2001.