When a family member or loved one asks you to co-sign a loan, it puts you in an awkward position. On one hand, you no doubt would love to help this person in any way you can. On the other hand, co-signing a loan brings major risks that can lead to financial ruin. Many clients who need help from a St. Louis Bankruptcy Attorney are people who co-signed a loan only to have the borrower stop paying. It may be difficult, but it is always best to say no to this request. It may cause problems in the short term, but you will be better off for it.
The Dangers of Co-Signing from a St. Louis Bankruptcy Attorney
Before signing anything, ask yourself, “Would I be willing to loan this person this amount of money?” If the answer is no, then it is best to steer clear. In fact, loaning them money is a better idea: at least if they don’t pay you back, that is the end of it. With a loan, it is something that may haunt you for years. As a St. Louis Bankruptcy Attorney, we have many clients with a previously sterling credit history suddenly find themselves in trouble because a child or sibling defaulted on a loan.
Any loan you co-sign will be treated as if you signed it. If the borrower cannot pay, you will be responsible for the loan. If you cannot afford to take over the payments, don’t do it. You can certainly try to help them in other ways, but co-signing a loan is almost always a bad idea.
If you have co-signed a loan and the borrower defaulted, a St. Louis Bankruptcy Attorney can help with this unfortunate situation. At The Westbrook Law Group, we will help you during this difficult time, letting you break free from this onerous loan and the stress it brings. For a free consultation, contact us today.