Co-Signing Financial Papers

Co-signing any financial document (mortgage, credit card, lease applications) is risky.  Some people do it to help out a friend or relative whose credit isn’t great.  This alone should set off alarm bells — if their credit is not good, then you know they’ve probably had trouble with the financial obligations they already have.  Adding new credit options for them might actually be deconstructive. 

This scenario also leaves the good-natured co-signer vulnerable.  This is especially evident when one co-signer decides to file for bankruptcy.  The bankruptcy will eliminate the filer’s personal liability, however the non-filing signer is still exposed to collection attempts.  The non-filing co-signer is liable for the ENTIRE amount of the debt, not just half of it.