3 Considerations Before Taking On Another’s Debt

Note: We are currently in a short sermon series starting Sunday, October 4 through Sunday, November 1 entitled Financially Fit. Join us at either North Richland Hills Baptist Church or Cross Church for this important series. You can also access important financial tools that accompany the series by clicking here.

Theo and Marla had been married for a little over three years. Theo had just graduated from Texas State University and was still looking for his career job. Until then, he was working as a dockworker for UPS. Marla was a receptionist during the week and worked at Waffle House part time on the weekends. Between credit cards, student loans, and department store credit, they were swimming in debt. They were discouraged when their friends were buying homes and they barely eked out enough money to pay rent. They wanted kids but felt they were financially stuck in life.

There are times in life when our compassion to assist someone struggling with debt moves us to action. Theo and Marla’s family wanted to help them financially. But should they?

We should note that God loves generosity. Again, God doesn’t like generosity but He loves it. The Bible describes a righteous person as someone who gives to others and lends to others (Psalm 37:21, 26). Further, God loves when generous people lend freely (Psalm 112:5). To be moved with compassion for another person in need is a wonderful thing. Yet, we must be careful that our compassion does not outpace past our wisdom.

1. Evaluate the Character of One in Need. Before Theo or Marla’s parents give to their children, they must ask a crucial question, “Will they have enough discipline not to borrow more? Will they exercise the discipline necessary to curb their spending?”

When you lend to a compulsive spender or a compulsive gambler, you are not being wise with your money. In fact, you are doing more damage to them and you are spending your money foolishly. Author Randy Alcorn has telling statement about this kind of lending: “Loaning money to bail out someone who is lacking financial discipline is like trying to put our fire with gasoline.” Before you lend money, you should ask yourself, “Is this what they really need?”

2. What Impact Will a Loan Have on the Relationship? Loaning to your children or friends will have an impact on your relationship. Many years ago, Traci and I were driving a 1992 Ford Explorer home to be with family for Christmas. We left Texas during an ice storm and noticed the engine was not “sounding right” as we drove through Oklahoma. When we arrived in Indiana to be with family, we discovered the transmission was compromised. I was depressed because transmissions were not cheap and I did not have the money to take care of the need. My father graciously secured someone to fix the transmission and paid the entire bill on our behalf. It was not loan but a gift.

Be aware that the relationship will change once the loan is made. Often, the relationship is greatly injured when money comes between friends or family members.

3. Do Not Cosign a Loan. The Bible, and Proverbs specifically, could not be more clear about this – do not assume responsibility for another person’s debts: “Be not one of those who give pledges, who put up security for debts” (Proverbs 22:26). Your compassion may move you to do this, but when you sign for someone else’s debt, you are effectively saying, “I will answer for all this person’s financial decisions.”

Rather than assuming responsibility for Theo or Marla’s debts, family members would be wise to help them build a budget. They could also generously give them a financial gift to assist them during their time of need.



The Series on the Ten Commandments: In Case You Missed It

Recently, I completed a series on the Ten Commandments. In the series introduction, I offered three reasons why the Ten Commandments remain important for our day:

1. The Ten Commandments communicate the character of God;

2. They show us the need for mediator;

3. They show us God’s grace.

In case you missed any of the series, here are the links to the series.

The First Command: You Shall Have No Other gods Before Me

Quick Summary: From the hit movie, The Life of Pi, to the gods of Mount Olympus, the Bible’s rationale for why worship should be exclusive.

The Second Command: Do Not Worship Idols

Quick Summary: Idols are not simply found on the silver screen of Indiana Jones movies or inside the pages of  National Geographic magazines.

The Third Command: Do Not Take the Lord’s Name in Vain

Quick Summary: More than profanity, God’s name is trademarked and copyrighted.

The Fourth Command: Remember the Sabbath

Quick Summary: Remembering our need for rest.

The Fifth Command: Honor Your Father and Mother

Quick Summary: Exploring the biblical stories of Noah and Joseph in how best to honor our parents.

The Sixth Command: You Shall Not Murder

Quick Summary: Thoughts on the practice of suicide, euthanasia, and abortion in looking at God’s rationale to protect human life.

The Seventh Command: You Shall Not Commit Adultery

Quick Summary: God designed sex as act that glues two people together. Sex is relational cement that belongs only in marriage.

The Eight Command: You Shall Not Steal

Quick Summary: Ask any mother of a preschooler and she will tell you children possess a keen sense of ownership.

The Ninth Command: You Shall Not Lie

Quick Summary: From former Notre Dame coach George O’Leary to the famous court cases of Casey Anthony and George Zimmerman, a look at the level of honesty in contemporary culture.

The Tenth Command: You Shall Not Covet

Quick Summary: The command that places handcuffs on our hearts in addition to our hands.