Insecure Security

For Monday, July 2, 2007
Proverbs 22:26-27

Be not one of those who give pledges,
who put up security for debts.
If you have nothing with which to pay,
why should your bed be taken from under you?

The proverbs are quick to encourage generosity. They are also quick to discourage foolishness. It is generous to give and to give sacrificially. It is foolish to tie oneself to another man's questionable ability to handle his money properly.

The very fact that a person needs another signer means something about him carries risk. Perhaps he simply has yet to build a credit history. Perhaps his credit history is poor. Perhaps he does not have sufficient equity to cover a loss. Whatever the case, there is risk. You should decide beforehand whether or not you can sufficiently cover the risk. If you decide that you can, you should already in your mind treat the co-signing as a gift given. If the other person comes through and you lose no money, then that is an added bonus.

To approach lending your name and property as security as a risk that you cannot afford, but that you do out of loyalty or guilt helps no one. You put yourself in a worrisome position. Even should the other person come through, you meanwhile are anxious. If he does not come through, if he is late in coming through, there will be inevitable tension in your relationship and likely a break in it. Then there is the very real financial loss. If you are married and if you have children, you loss becomes theirs.

Again, it is not giving generously that is the issue here. It is committing to something that you have no control over - the ability of your neighbor making good on what he has committed to - that is the issue. Don't make commitments that you cannot keep without loss you are not willing to accept gracefully.

Remember, the Gospel is about giving treasure away. It is not about making loans that remain valuable to you and which will bring harm if not repaid.