There are certain financial decisions that I will never make. For instance, I will never take out a payday loan; they just have way too many downsides. There are also financial decisions that I will never make again. For instance, I will never be co-signing a loan for a non-family member. The stress is just too irritating. Here is what I have learned about this financial mistake.
The Loan
I have a small company that distributes supplies to taxidermists. It’s really nothing more than a hobby and an excuse to get out there and explore nature, while making a little money. Now, I am a writer by trade. I dabbled in websites a little, but I just don’t have the patience to learn a whole new system. Instead, I hire that out to friends that know what they are doing. For my driftwood distribution company, that’s just what I did.
I contacted a friend from college, and he gave me a couple options. He could charge me full price for the website, which I could pay for up front so he could buy a new computer since his died. Or, I could co-sign a loan for him to get a new computer since he got into some credit trouble in college. He since had a high paying job, and I trusted he could make the payments. He assured me the credit card (that’s how the loan was originated) would be paid off within one year.
The Process
I agreed to the loan, and then he bought a computer. He worked with me and put several hours’ worth of work into my site. He updated it every month or so as I saw something that needed tweaked or changed. I was happy, and I would check in periodically to see how the payments were going on the card.
After a while, he stopped replying to emails. I decided I could take over management of the site and tried to get the login and access URL from him. That was six months ago.
The Frustration
After repeatedly not returning my phone calls, emails, text messages, or Facebook messages I decided to check to see if I could transfer the card completely to his name. Customer service was not helpful saying the only way I could was with a court order.
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I logged onto the account and saw that there was over $5,000 charged to this card. A quick review of the history showed that although he was making regular payments, he was also using the card for not just every day purchases, but also frivolous purchases for items such as flowers, toys from technology websites, and eating out. Needless to say, I was irritated.
The Conclusion
I still have not heard from him. Every time I call his phone it is turned off, so I leave one more message. I have called his work, his cell, sent emails to work and home, and have heard nothing. The only thing I can do, and have done, is cancel the card so no more purchases can be made, and hope that he continues to make payments. I really do not want to have to hire a lawyer, but if it comes down to it I’m not willing to destroy my credit, or part with $5,000 of his spending.
Wrapping it Up
There is still a chance this can work out positively. I have high hopes, but I am aware that I may have made a very stupid financial mistake. My lesson is that unless the person is family, I won’t even consider co-signing a loan.
Have you ever co-signed a loan? Did it work out for you?
That’s awful! I wouldn’t co-sign on a loan with anyone other than parents, family or a spouse and even then that’s knowing that it’s a smart idea and setting some ground rules over its use.. best of luck to you in resolving it!
That is terrible, absolutely terrible. I don’t understand how people can do that. I like to take Suze Orman’s advice when it comes to cosigning-just don’t. She has the same philosophy for loans. If you can’t afford to not get it back, then you can’t afford to lose it. I am always amazed at how some people treat others and have complete disregard for others.