Day 14: Cosigning is crazy

Main Point: It is stupid to cosign.

Today’s assignment: Pledge not to cosign with anyone other than your spouse. But if you decide to cosign for someone, make sure you can afford to pay the debt in full should the person default on a loan.

What I wanted to buy today, but didn’t:

I bought Bojangles’ today and I don’t feel guilty. After two weeks of home-cooking, I know that I don’t need to eat out. But I basically ran out of my apartment today and took refuge in a library because my heat isn’t working. I packed a sandwich and fruit to be good, but left it on the dining room table. So while I was out, I needed something to eat. So I stopped by Bojangles’ and I’m fine with that. It’s just funny how Michelle mentioned falling off the wagon by stopping by a fast food restaurant today. She’s psychic.

What was easy about today?

It was easy vowing not to cosign for anyone other than my spouse. This chapter scared me straight.

What was hard about today?

It was hard not to eat out.

What did I learned from today’s chapter?

A co-signer is actually a borrower. I had no idea that cosigning was so bad because “you are pledging to pay a debt for an asset that you have no control over. Cosigners don’t have ownership interest in the asset, but face several risks:

    • They are responsible if payments aren’t made on time are not made on time.
    • Their credit history could be damaged if late or no payments are made.
    • A creditor can pursue and file a lawsuit for late fees and attorney fees if loan goes into default.
    • A creditor may get a wage garnishment for the unpaid debt.

I also learned that people can “piggyback” off others’ credit. This occurs when someone tries to rebuild their credit by getting someone to add them on a credit card as an authorized user.

What I was feeling today about my finances?

Again, I’m feeling meh. I tried went ahead and tallied up my bills I’d have to pay off in the next two weeks. Even with my paycheck and depending on if I paid one full debt off, I’d have about $200-$400 for everything else – gas, food. My birthday falls within this period AND I’d like to get my hair done. I got it done in mid-December. Ugh. Decisions, decisions.


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