Don't Do it! Don't Co-Sign Someone Else's Debt
I have heard horror stories from people I know, about times they have co-signed for a family member or friend and then was left to pay hundreds and at least one case I know, tens of thousands of dollars. That’s why the bible is so clear on this matter. Over and over again, it says, “Don’t do it” or something to that affect.
What is a Co-signer?
As a cosigner, you are “a joint signer of a negotiable instrument, especially a promissory note, who promises to repay the loan amount, if the primary borrower cannot.”
Some Things Have Changed
There was a time when people would give their word and then shake in agreement on a deal. A man’s word was his bond; it was as sure as a signed check you could take to the bank. These days, that’s not the case. Breaking one’s word is common and prevalent. In fact, contracts have become increasingly more complex as get-overs look for loopholes or vulnerabilities to get out of paying what they owe. But don’t assume a verbal contract is not binding; it just may be harder to prove.
Some Things Haven’t Changed
Either way, scriptures say stay clear; don’t secure someone else’s debt. Do not be one of those who shakes hands in a pledge, one of those who is surety for debts; if you have nothing with which to pay why should he take away your bed from under you (Proverbs 22:26.27)? Don’t be a co-signed for a stranger or someone you do not know well (Proverbs 11:15). This could be something like a business deal. Someone’s always proposing some joint venture to do this and that. Don’t do it! Don’t co-sign for a friend (Proverbs 17:18).
In earlier posts, this week, I’ve been showing you how the bible warns you away from
borrowing and lending; and discussing what you should expect if you chose to move forward anyway. If the bible warns you away from borrowing yourself and tells you to “owe no many anything but to love one another”, why would it support you 1) helping someone else borrow and 2) co-borrowing on someone else’s behalf? It doesn’t. Why should you lose your bed or other assets if he/she cannot or worse yet, does not pay? Why should you jeopardize your wages being garnished because they defaulted on their debt? Why should you bring stress, frustration, and potential financial hardship on your household because you didn’t know how to say, “No.”
This is situation where you have to go in with your eyes wide-open. If someone comes to you to co-sign for a debt, don’t do it. Maybe you can help them think of other, more affordable, options. It is obvious they cannot afford the debt on their own- either because they do not have the means and/or because their credit shows little credibility when it comes to meeting obligations (basically, they don’t pay what they owe when they owe it). So, creditors need someone else they can rely on, since they can’t count on the primary alone. Don’t do it.
Conclusion
If you think it’s a true need and you can afford to do so, gift your family or friend (or stranger) the money and let them pay the debt outright. Or maybe you can gift them part of the money, making the balance affordable to them. So maybe they want/need transportation to and from work and want to get a beater that costs a few thousand dollars. If you have, it’s better to gift them the money than to co-sign a debt. Empathize for people’s situations, guard against enabling poor behavior, and be prayerful for opportunities to be a blessing.
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Definition (co-signer) per Dictionary.com (8/5/2021)
