Co-sign

 Do you realize King Solomon, considered the wisest man that ever lived instructed us to never co-sign?  

My child, if you have put up security for a friend’s debt or agreed to guarantee the debt of a stranger—  if you have trapped yourself by your agreement and are caught by what you said— follow my advice and save yourself, for you have placed yourself at your friend’s mercy. Now swallow your pride; go and beg to have your name erased. Don’t put it off; do it now! Don’t rest until you do. Save yourself like a gazelle escaping from a hunter, like a bird fleeing from a net. Proverbs 6:1-5

You put yourself in a difficult situation. If you do this you need to have the funds to pay the debt if the person you are helping defaults. I have heard of bad stories of this nature. A young couple co-signed for me to buy a motorcycle when I was about 19. Through no fault of my own, it was totaled not too long after I bought it. The insurance was not going to give me enough to pay it completely off. I had to continue making payments for 6 months until the debt was paid off. At that age, I thought I'll just quit making payments. Then my co-signer reminded me if I stop paying, he will have to pay.  As a very young man, I hadn't even thought about it.  I did make the payments until it was totally paid off.  It would have been difficult for my co-signer had I not continued to pay. If he had been unable it would have ruined his credit as well as mine. King Solomon tells us to get ourselves out of an agreement like that.  Often the person that needs the help of a co-signer does not understand or care when they get into financial trouble. They know they need help because they can't do it on their own. King Solomon strongly advises against guaranteeing another's debt. Today I understand why. It has the potential to ruin your credit if the person that you help defaults. I am thankful that the young couple co-signed for me. It got me started in life where I was able to borrow on my own. But that is another thing, we borrow too much because we want everything now.  It would be wiser to save up and get what we need or want without paying the interest. If you decide to help someone, be sure to have the ability to pay the debt yourself. Don't put yourself in a place that could destroy your own credit.   God bless, LVZ.