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 was quite nervous and a little embarrassed that I needed financial advice. I met with Jerry Janiec and he was very helpful. He made me feel comfortable and explained everything in easy to understand terms so that I understood what my options were. I would recommend David Sklar & Associates for anyone in my position.
Melissa Blackburn
19:53 17 Nov 22
I was fortunate enough to be referred to David Sklar & Associates Inc. by a family member. Now in the10th month of a Consumer Proposal process, I am very impressed with the organization, professionalism and impeccable customer representation that I have experienced. To this effect, I amparticularly thankful to Jerry Janiec and Rhoda Lewis for their excellent work.
Suzanna Vaclavik
12:21 16 Nov 22
Recently dealt with Christine at David Sklar & Assoc. and worked out a Consumer Proposal to put forth to my creditors for my Credit Card debt. She was very courteous, professional and put me at ease with a proposal that I can afford on a monthly basis, which will eliminate my debit in a reasonable timeframe. I would recommend Christine and this firm in a heartbeat. Very happy with the service and attention I got !!
Patrick Kovanchak
01:59 15 Nov 22
Excellent customer service. Special thanks to Olga for being prompt and helpful. She’s a star. Bibi is helpful as well. Great agency to work with.
Fady Tadros
19:28 14 Nov 22
After seeing your commercial play on CP24, I realized that it addressed all the questions and concerns I had about my financial situation. It all started with my one phone call to your office. I had the extreme pleasure of working with Cori Naron at your St. Clair West office in September 2022. She took the time to explain what my options were knowing that it was a very stressful situation with my debt load. She made me feel at ease with my decision to file a consumer proposal and outlined the benefits to me. She is thorough and her attention to detail is outstanding. While it takes a little while to reap the benefits of making this hard decision, she took the time to reassure me that it was in my best financial interest. Well done David Sklar & Associates for having such an amazing representative at your company and for allowing me to "get a fresh start"!
David
14:31 14 Nov 22
Very highly perfection individual, well executed and greatly knowledgeable in his work, which guided me me the right decisions making opportunities. Thank you.Sincerely, Peter Romasz
Peter Romasz
20:18 13 Nov 22
Trina Powell was very helpful and made the process very easy. Thanks again for all your help.
Jennifer Hager
17:59 06 Nov 22
Jerry is a caring, trustful, knowledgeable and competent Sklar associate. He understood my needs and quickly went to work on my behalf. Ever indebted to David Sklar and Associates and especially to Jerry for his professionalism and caring approach.
David Craig
19:31 31 Oct 22
Jerry Janiec is very knowledgeable and very helpful everything he explained to me was straightforward and very easy to understand. I'm very pleased to be working with Jerry to become debt free. I will definitely be recommending to any friends or colleagues your services.Thank you again for helping me get on the road to be debt free. 5 Stars is well deserved.
Christopher Rakobowchuk
17:41 27 Oct 22
Hi there! I am very glad to met this company, especially Jackie Stanley. Thanks for her great work and help me to save my money! Very appreciable!
Mehri Agil
02:43 26 Oct 22
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