Cosigning is making an agreement with a person or entity to pay debts taken out by someone else. Such agreements require you to pay the monthly loan payments or the full amount when the person becomes delinquent on his payment of the loan (regardless of whether he is unable to or simply decides not to make good on the loan). Allowing someone to use your credit card technically puts you in the same situation because your contract with the credit card company requires that you pay all charges you authorized on that card.
A person’s request for you to cosign to cover his debt may not look like a bad thing when the appeal is being made to you and such request have a lot of emotional appeal behind them because many of the people that would ask you to do appear to need help maneuvering the financial landscape of life. Yet, it will cause you immense emotional pain, heartache, and financial turmoil when they do not make the monthly payments or pay off the debts as contracted and expected.
It is generally an irresponsible action to cosign for someone given that the vast majority of these situations wind up with the other party not paying as agreed and thus forcing collectors to come after cosigners. It is also irresponsible considering that you don’t have enough in liquid assets to fully cover the total debt if you’re ever responsible for paying it. These situations will negatively affect your well being and that of your family and leave you in a tumultuous financial and relational state.
Cosigning arrangements do not work any better among family members and close friends. Often, the fallout from these situations causes separation of friends and many times ill feelings and un-forgiveness toward one another.
You need to respect that the financial institution does not consider the requester’s personal financial situation healthy enough to sign for his own debt and that these institutions are experts at judging the likelihood of repayment by people with particular financial profiles. Then, just say no!
Otherwise, a significant amount of your disposable income will soon be spent paying off debt taken out by other people (that you could be using to build wealth) and your credit will be wrecked, no matter how much income you bring in, because you are persuaded to cosign for irresponsible and untrustworthy people. You must pray and watch those that labor among you knowing that all have sinned and fallen short of the glory of God. In so doing, many have learned bad habits in the financial arena of their lives. Then, you must choose not to repeat their mistakes and not to help them continue to make such mistakes. The best way to help the ones you can help is to use available cash, at a level that will not impoverish your family, when you see a true need and believe you are supposed to be a party to resolving it.
Another thing to consider is that your help is not often the whole solution to deep problems of need, poverty, and financial troubles experienced by other people. While there are times that the Good Samaritan response may mean that you offer financial and other resources, yet there are other times when the Apostles Peter and John’s response is needful, “Silver and gold have we none, but such as we have we give unto you – in the name of Jesus Christ be made whole.”
You should want to be a good steward and allow God’s process to build the type of wealth necessary for your Good Samaritan experiences but also desire spiritual discernment so you can truly detect what is needful and be able to give the Word, encouragement, prayer, healing, and/or deliverance that sets the captives free and gives them the impetus to take on the responsibility and discipline needed to be good stewards and prosper in the future.
Please pray for this ministry and email any questions. May God bless you richly as you follow His plan!!!
Proverbs 11:15, 17:18, 20:16, Romans 13:8, Ephesians 5:15-17
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You can find books authored by Randy Parlor and Karen Parlor at www.Amazon.com
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