My parents are financially irresponsible and want me to cosign a personal loan. What should I do?

My parents (in-law's, actually) are in their late 50's, and should be preparing for retirement. In stead, they are spending erratically, racking up massive credit card debt, remodeling their home, etc. Yesterday they asked me to cosign a personal loan, which they plan to use to pay back a payday advance from a predatory lender. How to I help my parents without jeopardizing my financial security, too? Any money I give (I don't lend money to family) is that much less I have for my kid's college accounts.My parents are financially irresponsible and want me to cosign a personal loan. What should I do?
Oh boy, what a mess to be in. On the one hand, you want to help and be accommodating since after all, these are your wife's parents. On the other hand, if you say ';no'; you could strain relations between you and the in-laws, not to mention your wife.





However, to protect your own credit, absolutely do not co-sign on a personal loan ~ever~ with these people. From what I've read, they will probably default on the loan leaving you stuck with paying the tab if you want to preserve your credit. If you want to give them the money that's fine; however, this sets up a precedence that you will give them money when asked, therefore enabling them to continue spending foolishly.





My ex is like your in-laws and my grown sons have a great way of handling their dad's financial irresponsibility:


First, they never hand their dad cash but will buy him groceries or fill up his gas tank whenever he asks for money. If he asks for additional funds, they always reply ';Sorry Dad, that's all I have to spare.';


Secondly, when ever their Dad runs short, they will sit down with him and discuss his spending habits %26amp; bills, and help him develop a strategy for reducing debt. This debt reduction plan may even include having a garage sale, or selling off a car.





You could try this with your inlaws, and even offer to pay for them to go in for credit counseling, but never, ever give them cash or co-sign on a loan. Once you start, you'll be setting yourself up for a lifetime of phone calls and visits from them whining for financial help.








My parents are financially irresponsible and want me to cosign a personal loan. What should I do?
Don't do it. Tell them you don't lend money to anyone, family included. They have made their bed and they should lie in it.





If they try to manipulate you, just tell them you'll prevent them from seeing their grandchildren.





You shouldn't touch this co-signer thingy with a 12 foot barge pole. The only family you are responsible for are the ones under your own roof.





Best wishes, and be strong.
Marcus,


NO, NO, NO and NO! Please do not cosign. It is like co-signing for an inexperienced teen. Practice tough love, much as they would for you if your roles were reversed. Sometimes you have to let them fall clear to the bottom before humility and life kicks in some reality. Your wife will have to understand. Refer them to a debt counselor/consolidation agency and tell them the buck stops here and now. They will be upset with you...What can you really say? I feel for you because you are between a rock and a hard place. Suggest mom and dad in law, health permitting, get a second job. I wish you loads of luck.
DO NOT DO IT! The fact that they need a cosigner at all at their age says it all. You would be jeopardizing your family's future. If you decide to give (lend) them a large amount of money, ask for a Second Trust deed against their house. That way, when they pass away, you may have an opportunity to recoup some of that money.
DO NOT DO IT!!! If they don't repay the loan, the lender will come after YOU and it will negatively affect your credit and will hurt your chances of your financial security in the future. As you said, they are very financially irresponsible and can get you down that path too...
Do not co-sign. Distance yourself from them as much as you can
Do NOT do it!!!!! In their 50s and needing a cosigner? That is sad.
Under no circumstances should you co-sign a personal loan for your inlaws. You already know that chances are they will default on this loan too and then you would be held liable 100% to pay it back.


Not to mention their ';late payments'; and default could hurt your credit score.





Simply tell them a little white lie:





Mainly that your own credit isn't good enough to qualify you as a Co-signer. Case closed. Let them move on to the next prospective family victim.





They will never learn financial responsibility if the family keeps bailing them out. And one more thing.... Never do financial deals with your family and best friends. It has an 80% chance of ruining your relationship with your inlaws and friends.





If you have the cash and feel sorry for them then send a money order to the loan sharks to keep their payments up to date.


But make sure that there is no way that this could be interpreted as you assuming responsibility for their payments. One reason for using a money order and not your personal checks.