The Seldom Thought of Reason for Not Cosigning
When I was 18 years old, my dad cosigned an application so I can get a credit card. I don't recall our conversation. I just remember getting the credit card because somehow, I talked my dad into cosigning with me. I never asked my dad why he did it. I guess it's because I know what he would say. To him, I was a risk worth taking, and I'm sure he believed I would own up to the responsibility of making the payments. I'm happy to report he's never had to make a payment on my behalf. Still, my dad cosigning for me was a mistake, but not for the reasons you might think.
God’s view of consigning or guaranteeing a debt
Although the Bible doesn't specifically use the word "cosign(ing)," it definitely addresses the topic and instructs us against doing it. In the book of Proverbs, a book of wisdom, we find several passages that provide the perspective God has on this practice.
Whoever puts up security for a stranger will surely suffer harm, but he who hates striking hands in pledge is secure. Proverbs 11:15 (ESV)
One who lacks sense gives a pledge and puts up security in the presence of his neighbor. Proverbs. 17:18 (ESV)
Be not one of those who give pledges, who put up security for debts. If you have nothing with which to pay, why should your bed be taken from under you? Prov. 22:26-27 (ESV)
Those scriptures seem pretty clear and straightforward to me. I wish the Bible were as clear on every topic as it is on this one. Proverbs 6:1-5 even provides instructions for getting out of this type of mess should someone knowingly or out of ignorance get into it. God makes it abundantly clear through these Scriptures that we should NOT cosign or guarantee debts.
Yet, many Christians still engage in this practice, especially when it comes to their kids or grandkids.
I've heard many reasons for cosigning from parents and grandparents. Some ended in tragic financial situations. Others turned out fine, giving them a reason to believe they did the right thing. The thing that most people miss or never seem to question in these transactions is God's will.
I'm a parent, a grandparent, a brother, and a son. If any of my family members ask me to cosign for them to get a loan or a credit card, there is an intense desire within me to help. I'm not unique in this. We ALL, out of our love for our family, want to be there for them, especially when they have a genuine need. But we cannot ignore or disregard God's will in all this, and He's made it pretty clear this is not the way to do it.
God knows what that family member needs and can be trusted to provide for them.
If it's something God has deemed as necessary, God will provide that need without you having to step in and do something God said not to. God will sometimes withhold things from his children. We don't always understand why he does this, but we can trust him because he has full knowledge of all circumstances, something we lack, and always does what is right and good.
Romans 8:28 reminds us that "all things work together for good," even the things that happen as a result of God saying, "no." It's a struggle for us to watch a loved one do without, and because we don't fully understand everything that's at stake, we must rely on God's word to instruct us in these situations. Otherwise, our hearts will lead us to make the wrong decision that may hurt us both.
The primary reason for not cosigning is to prevent overriding God's will in someone's life. We may think we're helping by providing someone a way to get money, but as my pastor once said, "If a problem can be solved by money alone, it's not a real problem because real problems can't be fixed with money." It is more important that we help a person remain in God's will than help them get what they think they need.
How should we help?
We should always obey the word of God and never use it as an excuse for not helping others. Although we should never cosign for someone, we should also not refuse to help them when we can. Our response to helping will differ depending on the situation. However, we must first take the time to understand the problem entirely. Second, pray and seek God's word, and third, the counsel of our spouse (if married) and trusted godly friends. Then, and only then, can we make a good decision.
Ways you can help:
You could make a gift for the amount they need.
Provide them the money as a loan, but only if you can accept that should they not pay you back, you will forgive the loan and not have any ill will toward them. If you can't do this, don't loan them money.
Help them get what they want on their own
Financial education - share resources that will make them better stewards.
One-on-one financial coaching - coach them to become better managers of their finances.
Credit repair or improvement - help them qualify for a reasonable loan without a cosigner.
In what ways have you avoided cosigning for someone but were still able to help?
Share with us in the comments below!
For Further Reading:
What Does the Bible Say About Debt?
Spending as a Disciple of Jesus
Two Keys to Managing Money Well
Why is Tithing Relevant to us Today?
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