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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The team at David Sklar and Associates Inc are very professional and are willing to help you get out of debt. Highly recommended.
Melissa MacKenzie
12:35 29 Mar 23
I would like to thank the team at David Sklar and associates inc. for all the time and effort they put in to support this process for me. This topic can be challenging to disclose but a big thank you to Christine for going above and beyond in guiding me through all my options and supporting me through the decisions. I cannot recommend this group enough , as they have shown me compassion , knowledge , and understanding throughout the entire process. I look forward to the next step of this process and learning how the proper way of becoming financially educated through the support of their financial counselling team. For anyone who is struggling , just know that there is a wonderful group of educated professionals at David Sklar who are available to help!
Michelle Plouffe
18:45 14 Mar 23
It took me awhile to get up the courage to contact David Sklar but I’m so glad I did. Trina walked through my options with me and provided the knowledge I needed to make a decision to help turn my financial situation around. She is patient and empathetic and answered any and every question that I had. Trina provided me the reassurance I needed that I was making the best decisions for me and my family. I’m so happy that I reached out and now have a plan to get back on track.
M. Mackenzie
19:59 12 Mar 23
Trina was very helpful and thorough.
Sam M
15:26 12 Mar 23
Christine was very helpful, kind, and understanding. She explained everything thoroughly, answered any questions I had, and was responsive to any concerns I had. 100% would recommend
Katherine Campbell
17:29 08 Mar 23
Jackie Stanley is excellent she took the time to explain everything to me and I am so grateful to her for giving me a fresh financial start so if you have any doubts don’t and go see her if you want to achieve financial freedom!
Heather Helfield
21:24 06 Mar 23
Amazing friendly staff that knows what they are going. They make a difficult situation not so bad. Would give 10 stars if I could.
alie Balan
22:37 25 Feb 23
Very helpful and kind and gave me all the available options before helping me decide which one was best for me. I would definitely recommend Jackie
Alison Rivard
01:01 21 Feb 23
Great experience i was in financial trouble and someone of my friends recommended this company. Cori is a wonderful and welcoming person she did a very good job and came up with a smooth and flexible monthly payment after the reduction. i highly recommend this company. Thank you David sklar and special thanks to Cori.❤️🙏🏻
Jasmine Joseph
22:08 13 Jan 23
Met up with Mr. Jason Sklar to discuss more in person, very thorough and clear. He is very kind and thoughtful, I will be referring anyone with the same situation to David Sklar & Associates.
Ariel Domingo
02:33 29 Dec 22
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