What is your personal policy about co-signing loans? Especially for someone who is already in default of at least one loan you know of. To make a long story short, my nephew (21 yo) cannot get a car without a co-signer because he has made stupid decision (even after I have told him NOT to) after stupid decision. He flunked out of college (skipping classes because of being hung over), he took out WAY more in loans than he needed to buy things like plasma TV, gaming system, huge speakers for a car that was a piece of crap... he even bought a motorcycle... in October last year... and although I said it was a truly stupid thing to have as your only transportation in the Midwest in winter, it didn't matter because it broke down a month later and he had to junk it. The list goes on and on. I gave him a car that we were going to use as a trade-in when we bought our new (used) car a few years ago. He wrecked it and they gave him $3000 in cash, which he blew through without getting another car.
I feel like we've done our part. I KNOW he will default on this loan. He has not been responsible about ANYTHING. Now, financially, we do fine and are literally the only ones in the family that do so. But we do fine because we are disciplined and smart with our money. We save in advance for any major purchase and anticipate it in plenty of time, shopping smartly. We have emergency fund and save for retirement, dd's schooling, etc. We live simply and I cook almost everything from scratch, sew, make our soap, and we don't blow money on electronics (we all have old phones without even texting and our TVs are all old CRTs). We are very careful to be debt-free while keeping exceptional credit scores. We work HARD to be in this position. And have done so for decades (we're in our 40's and 50's). I am not willing to risk our financial security at this point in our lives (dh will retire in about 10 years) or what we have done to provide for our dd.
My sister is now bugging my mom about co-signing. We SUPPORT my mother and she lives with us. If nephew defaulted on the loan, my mom wouldn't have the money to make the payments... it would be US! Not to mention that she is our financial dependent (according to the IRS), so if she dies, her financial obligations become ours (and we're OK with this, as things are NOW, but not if she co-signs the loan). I'm not even sure she could co-sign because mom has poor credit (lost her home, that had been paid off, because of using it as collateral for a loan for my sister... who then defaulted on the loan and my mom had to pay it off.)
There is SO much more to this story, but I just don't think that co-signing for anything is a good thing. My dh has said "No way!" I say "No way!" My mom wants to do it. She gets $600/month SS and all of that goes to Medicare supplemental insurance, meds, paying to go to the Senior Citizens Center a few times a week, and buying her own underwear. We pay, literally, for everything else... from buying her car and paying all auto expenses, utilities, phone, food. Everything.
I don't know what to do. We can't "forbid" my mom from co-signing, but it would be such a fustercluck if she did and I don't know what to do.
Thoughts?
I feel like we've done our part. I KNOW he will default on this loan. He has not been responsible about ANYTHING. Now, financially, we do fine and are literally the only ones in the family that do so. But we do fine because we are disciplined and smart with our money. We save in advance for any major purchase and anticipate it in plenty of time, shopping smartly. We have emergency fund and save for retirement, dd's schooling, etc. We live simply and I cook almost everything from scratch, sew, make our soap, and we don't blow money on electronics (we all have old phones without even texting and our TVs are all old CRTs). We are very careful to be debt-free while keeping exceptional credit scores. We work HARD to be in this position. And have done so for decades (we're in our 40's and 50's). I am not willing to risk our financial security at this point in our lives (dh will retire in about 10 years) or what we have done to provide for our dd.
My sister is now bugging my mom about co-signing. We SUPPORT my mother and she lives with us. If nephew defaulted on the loan, my mom wouldn't have the money to make the payments... it would be US! Not to mention that she is our financial dependent (according to the IRS), so if she dies, her financial obligations become ours (and we're OK with this, as things are NOW, but not if she co-signs the loan). I'm not even sure she could co-sign because mom has poor credit (lost her home, that had been paid off, because of using it as collateral for a loan for my sister... who then defaulted on the loan and my mom had to pay it off.)
There is SO much more to this story, but I just don't think that co-signing for anything is a good thing. My dh has said "No way!" I say "No way!" My mom wants to do it. She gets $600/month SS and all of that goes to Medicare supplemental insurance, meds, paying to go to the Senior Citizens Center a few times a week, and buying her own underwear. We pay, literally, for everything else... from buying her car and paying all auto expenses, utilities, phone, food. Everything.
I don't know what to do. We can't "forbid" my mom from co-signing, but it would be such a fustercluck if she did and I don't know what to do.
Thoughts?
Is that even possible?
That right there tells you a lot. He and his mother both are "keep up with the Joneses" kind of people.
