“It’s poor judgment to guarantee another person’s debt or put up security for a friend.” Proverbs 17: 18
This is one of those interesting and sometimes puzzling proverbs, but it makes you go, “Does the Bible really say, “It’s poor judgment to guarantee another person’s debt or put up security for a friend.”? In other words, “Don’t co-sign that loan for your friend!” But aren’t we supposed to help out our friends and family when they get into a jam? Help, yes. Co-sign, NO. Enable, NO. There is a difference.
So what is this all about, anyway. Well, have you ever ‘loaned’ somebody money, and then they forget to pay you back when they had promised? And then the next month comes along and again they forget or don’t quite have all the money they promised. And this happens month after month. The relationship begins to show a few cracks and it is now compromised. Resentment, anger, regret, and avoidance become the norm for the relationship. What was once a mutually honouring friendship has now soured.
So here’s the lesson… Even if the person is your friend or your sibling, you are not doing them a favour by securing their debt or co-signing their loan. First, the relationship has now gone from friend-friend, parent-child, brother-sister, to creditor-debtor. In one respect, it’s now a master-slave relationship. I know, that sounds harsh, but really, that’s what it is. Secondly, it’s probably a safe assumption that you are dealing with someone who lacks wisdom when it comes to money. Rather than learning how to use money properly, it is easier for them to ask someone to bail them out. As bad as that may sound, the reality is that they were willing to place the relationship in jeopardy for the sake of money.
If you want to be biblical and help them out while protecting the relationship, you have two options. Gently explain to them that you do not want to jeopardize the relationship and ‘loaning’ them money would do just that. The other option is to give them the money with no strings attached. Regardless of which option you choose, offer to show them how to wisely manage their money. It will pay dividends for the rest of their life, and save a friendship!
Finding Beautiful 
I co-signed three student loans for my children. Two were repaid in full. One child has procrastinated to repay in full, so I pay every month the remaining balance, thus causing me to include debt repayment in my will of estate to my children. Harsh eh?
Ouch! I learned the hard way myself. The thing about learning the hard way is that you never forget. One thing I’ve should have mentioned in the post is that there are circumstances / situations that may warrant a co-signer, but then it’s lender beware.