What God Says About Cosigning

January 12, 2012

“A man lacking in judgment strikes hands in pledge and puts up security for his neighbor.” – Proverbs 17:17

After one of their wins at the Super Bowl, Washington Redskins coach, Joe Gibbs, found he had a lot of money to invest. Some friends approached him about investing in some apartment complexes and it looked like a great opportunity. He didn’t have to put up that much, primarily he was just cosigning for the friends. But the economy soon soured and his friends were broke. The debt fell to him. While Joe was advised to declare bankruptcy, he felt like the honorable thing to do was to pay his debts. The Gibbs family suffered for over four years of sheer misery as they lived on basic necessities, using every spare dollar to pay off the debt. (1)

Thus, the danger of co-signing. Now, does that mean that co-signing should never occur? No, there are times you want to help another, and are willing to take the risk. A typical example is helping a child buy a new home. But, realize the risk and only co-sign if you are able and willing to pay the full debt yourself, because that may come about.

We have seen that in the parent-child relationship in churches. When our church built its first facility, we were so new that no bank would make the loan. But our parent church cosigned the note. It was part of that parent church’s good faith in Kingdom business that motivated their actions.

Proverbs gives wise advice in financial matters such as this. Head to the Bible first whenever you need wise financial counsel.

(1) Joe Gibbs, Racing to Win, Multnomah Books, July 23, 2003