Proverbs 6:1–5 (NKJV) — 1 My son, if you become surety for your friend, If you have shaken hands in pledge for a stranger, 2 You are snared by the words of your mouth; You are taken by the words of your mouth. 3 So do this, my son, and deliver yourself; For you have come into the hand of your friend: Go and humble yourself; Plead with your friend. 4 Give no sleep to your eyes, Nor slumber to your eyelids. 5 Deliver yourself like a gazelle from the hand of the hunter, And like a bird from the hand of the fowler.
The dangers of co-signing. Several passages in Proverbs warn against surety. The definition of surety is, in law, “one that is bound with and for another; one who enters into a bond or recognizance to answer for another’s appearance in court, or for his payment of a debt or for the performance of some act, and who, in case of the principal debtor’s failure, is compellable to pay the debt or damages; a bondsman; a bail” (Webster).
The Hebrew word translated “surety” is arab, which means “to braid, i.e. inter-mix; also to give or be security.” The person who is a surety involves himself with the life of another in the same way that strands of a rope are braided together. These and other verses in Proverbs warn against being a guarantor or security for someone else’s debts.
The most common way of being a guarantor today is co-signing. This practice is dangerous because a lender that requires a co-signer is indicating that the borrower is possibly not in a sound enough financial position to pay the debt. In other words, he is possibly borrowing beyond his means. The lender is saying, “We are not confident that he is qualified to pay the debt.” The one who co-signs is in the final sense himself the lender.
Thus, according to Proverbs, co-signing for an unlimited amount, for an amount beyond one’s means, or for an uncertain future amount is wrong. (See Proverbs 22:26-27.) It appears that co-signing for a limited amount is appropriate only if one is genuinely willing and able to loan this amount of money and, if necessary, to pay it and consider it as a gift, with no regrets.
In short, co-signing can be a dangerous snare. Being a guarantor is so dangerous that Solomon recommended a formula for extricating oneself. The first step to take is to humble oneself, which implies an admission of folly or wrongdoing, and plead with the friend for release. The second step is to refuse sleep until the matter is resolved. Tomorrow could bring disaster; it should be taken care of today. The third step is to escape as an animal would from a hunter by cancelling the agreement if possible or by otherwise limiting liability. If the person for whom one co-signs defaults on the loan, the co-signer will be the hunted.