Don’t Cosign Your Neighbor’s Loan! (Proverbs 6:1-5)

The Book of Proverbs is a diagnostician’s manual for wisdom and folly. It covers every topic from alcohol to women. So, if you want to live wisely, read Proverbs! And if you want to avoid foolishness, read Proverbs!
One of the topics Proverbs considers in depth is wealth, specifically, how to gain and use it. Proverbs 6:1-5 offers this nugget of advice for people who want to be money-wise: Don’t cosign your neighbor’s loan! And if you already have, get out of your responsibility as soon as possible!
Consider verses 1-2:
My son, if you have put up security for your neighbor,
if you have struck hands in pledge for another,
if you have been trapped by what you said,
ensnared by the words of your mouth,
Notice that these verses represent the advice of a father to a son. We learn how to manage our money from our parents. And we teach these management techniques to our children. The wise person both learns and teaches good money management, while avoiding bad money management.
Why is cosigning your neighbor’s loan such a bad idea? Why is it a trap and a snare? These five verses don’t say why explicitly, but it’s fairly easy to discern the reason. If the neighbor defaults on his loan, you’re on the hook for the payments. Do you really want your financial well-being to be determined by the actions of the guy who forgets to return the tools he borrowed from you?
Verse 3 offers a bit of sage advice about what to do if you’ve been unwise enough to cosign your neighbor’s loan.
then do this, my son, to free yourself,
since you have fallen into your neighbor’s hands:
Go and humble yourself;
press your plea with your neighbor!
Obviously, if you’ve cosigned someone’s loan, you can’t simply refuse to honor the terms of the agreement. You have to amend it. You have to get all parties involved in releasing you from your obligation. And that takes a lot of effort and even more humility. But eating humble pie is a small price to pay for regaining your financial independence.
How important should financial independence be to you? Enough to lose sleep over, according to verses 4-5:
Allow no sleep to your eyes,
no slumber to your eyelids.
Free yourself, like a gazelle from the hand of the hunter,
like a bird from the snare of the fowler.
Notice, again, how negatively Proverbs portrays cosigning your neighbor’s loan! It’s a hunter’s trap and a fowler’s snare. Hunters and fowlers don’t catch animals to help them. They catch them to eat them. If you don’t want to mortgage your financial independence to your neighbor, don’t sign his mortgage papers.
Now, I admit that these five verses take a pretty dim view of your neighbor. And they seem to be a little heartless. Shouldn’t we help those in financial need? Absolutely! But wisdom is shown in how we help others. You shouldn’t cosign your neighbor’s loan, but nothing here prohibits you from simply giving him money. Generosity kills two birds with one stone: It helps him, and it frees you.

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