Co-Signing Loans

Personal Loans

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The Dangers of Co-Signing Loans for Family Members

As Consumer Proposal and Bankruptcy Trustees in the Greater Toronto Area, we routinely hear heart breaking stories of people who have ended up with huge debts as a result of co-signing loans for family members.

Perhaps the most insidious part of co-signing loans, is the fact that family members are being put at risk to protect a bank/lender’s investment. Not only is a co-signer financially responsible for the debt – when the payments are missed, some agreements require the co-signer to immediately repay the entire loan.

If the banks/lenders (who are experts at judging the likelihood a debt will be repaid) think someone will not pay the loan – betting against them by co-signing, is a losing game. Whatever happens, they are the winners.

Don’t Do It Grandma!

So, what is Grandma to do when her 22 year old granddaughter asks her to co-sign a loan on a $26,000 new car?

Say “No”.

Or, if you are uncomfortable with a simple no, try a more gentle approach: “I love you _____, but I promised your Grandfather I would never co-sign a loan for anyone, even you.” Note: It is ok to lie to your grandchildren if it is to protect them and yourself.

Be Firm Mom and Dad!

If the 22 year old approaches her Dad or Mom for the co-signature, they can take a more direct approach with comments like:

  • Are you nuts?
  • You are 22 years old – what do you need a $26,000 new car for?
  • Save up your money, and buy a used car.
  • I will help you find a good used car – but I won’t pay for it, or co-sign a loan for it.

Don’t Be Played by Guilt!

There is nothing to feel guilty about if you refuse to co-sign a loan for a family member. By refusing, you are helping them to live within their means.

Just as you would stop a child from putting their hand on a hot stove burner – teaching a family member to stay out of debt and save for their purchases – is one of the best life lessons you will ever share.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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I worked primarily with Christine, who was very friendly and outgoing. She was quick to help me, and explained everything I needed to know very well. She's quick to answer any questions I may have as well. The other members I spoke with were also very kind and jovial, and were happy to help me with anything they could. They made sure my proposal fit within my budget, and got everything going very quickly. I was happy to work with them, and would highly recommend their very friendly service!
Melissa McAllister
Very processional and understanding of my situation. Thanks to all your team.
Luc Valade
Jennifer Norton's exceptional assistance with my consumer proposal was life-changing. Her professionalism, expertise, and dedication were evident from the start. Jennifer's thorough explanations and attention to detail created a tailored proposal that set a clear path to financial freedom. She went above and beyond, advocating for my best interests and providing invaluable support. Thanks to Jennifer, I'm on track to a stress-free financial future. I wholeheartedly recommend her – she's not just a financial expert; she's a life-changer. Thank you, Jennifer!
They made a difficult situation, easy thank you.
Ray Barkley
I had a great experience with Christine from David Sklar & associates. Very professional, and easy to get through. Thank you
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Great customer service and a smooth process to get your finances on track. Informative and thorough.
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From the moment I sat down in the office, I felt welcome and at ease. Grace Cuffaro was both friendly and highly informative. She is extremely knowledgeable and answered all of my questions in detail, making sure I understood before moving on. I was reassured throughout the process that I was making the right decision and that it was not uncommon nor anything to be ashamed of. I didn't expect my appointments to be such positive experiences, but that's exactly what they've been!
P Bains
I was in a tough financial position and found myself searching for relief. I came across David Sklar & Associates page when doing my research on financial advice. The reviews were amazing, but I was concern because I didn’t know what to expect. I made the decision to set up a consultation and had the pleasure to meet with Jennifer Norton. Right from the beginning, she was attentive, knowledgeable, and pleasant to meet with. The experience was painless and very educational. Jennifer made sure I understood my choices, answered my questions, and concerns promptly, in person, over the phone and via email. I’ve been working with Jennifer for a couple months now and I am pleased that Jennifer is the manager handling my file. I would and have recommend Jennifer Norton, David Sklar & Associates to anyone in need of direction regarding finances.
A.L Thompson-Lawrence
I had my first meeting with Jennifer, she was really understanding and extremely helpful, and got everything done in a timely manner.
Tamas Wint
Jennifer Norton has been the most helpful throughout this truly embarrassing situation that I find myself in. She is informative, understanding, and there is absolutely no judgment. She has handled everything in a very professional and respectful manner and I am SO glad that I have them on my side. Definitely a huge weight off my shoulders.
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