Recently, a man in our church who ministers to college students wrote the following question to the elders: “I was teaching my guys accountability group out of Proverbs 6:1-5. I have always taken this passage to mean that Solomon is against us becoming a surety for another person’s debt. Because I deal with college students, the question came up about parents cosigning for student loans or for their first apartment. I would appreciate input into this matter. Basically, is the teaching of Proverbs and thus the Bible that we should not become a surety for anyone else's debt regardless of our relationship to them and does this include cosigning on loans?”
Two elders shared their perspective on this matter, and because there may be others who wonder about what the Bible says about this situation, I decided to post the two responses here on the blog. The first response is from Curt Sharbaugh, who serves on our staff as one of our Associate Pastors. Curt received his undergraduate degree from the Moody Bible Institute and his graduate degree from Wheaton College. He writes:
I was the other elder who shared his thoughts on this matter, and while my response is not as technical or analytical as Curt’s, here is what I had to say:Here’s my two cents on this. I would say that there’s a danger in reading Proverbs as a list of prohibitions and commands. There’s a difference in terms of genre between proverbs and law. When a proverb says, “don’t” it doesn’t necessarily mean “never.” Take for example the interpretive guide to the book found in Proverbs 26:4 and 5: “Answer not a fool according to his folly, lest you be like him yourself. Answer a fool according to his folly, lest he be wise in his own eyes” (ESV). If the Proverbs were meant as commands in every case, we’d be in big trouble at this point. The writer has purposefully included these two opposing and yet harmonious proverbs next to each other to illustrate the fact that different situations may call for different courses of action. It’s interesting that a few verses later, it says, “Like a lame man's legs, which hang useless, is a proverb in the mouth of fools… Like a thorn that goes up into the hand of a drunkard is a proverb in the mouth of fools.” (Proverbs 26:7, 9 ESV). The writer is warning against the misuse of proverbs, while in that same context giving us a clue as to how they work. They’re wise sayings that guide us toward wise living. In some cases, they tell us foundational truths about the wisdom of God, such as “the fear of the Lord is the beginning of wisdom.” Sometimes, they do rephrase commands from the Mosaic Law in the form of a proverb (e.g. Deut. 19:14 and Prov. 22:28), but at other times, they simply tell us what is “generally speaking” the best course of action to take or what is “generally” true.As far as I can tell, Proverbs 6:1-5 is of the latter, and is giving us a warning of the danger of becoming legally liable for someone else’s debt. It does not mean that one can never do this. Clearly this is a concern of Proverbs as similar ideas are mentioned throughout. Sometimes the emphasis is on the foolishness of doing this with a “stranger”, that is, a foreigner (20:16). Sometimes it is more generally stated to include “neighbors,” that is, fellow Israelites (17:18). Here in Proverbs 6 it is stated comprehensively and includes anyone (notice the merism “neighbor” and “stranger”, i.e. everyone). I would say it’s teaching us that, generally speaking, it’s not wise to become liable for someone else’s debt. It could wreck you financially. But I would not say this proverb is saying that it is sinful to do so. What I think helps confirm this is that it does not appear to be a restatement of a Mosaic prohibition. Of course, even if it was, we may still need to evaluate it’s setting within the Old Covenant.Proverbs 6:1-5 would seem to be a general warning against taking on liability for someone else’s debt, but not without exception. Were we to go back to the setting of ancient Israel and ask about whether we could apply this to a father and his son, I think we’d hear an exception, but proverbs do not generally state exceptions. They’re just pithy statements of wisdom. Plus a son or daughter would not generally be referred to as a “neighbor” much less a “stranger,” so it’s even more likely they would not have been included in this general principle. Proverbs 6:1-5 is not a treatise on right and wrong business practices; it’s a short poetic discourse on the dangers of financial irresponsibility. So I would not conclude that cosigning a child’s loan, or one for someone who was like family for that matter, would be wrong. There may be other situations where this would not be wrong. In general, however, it’s wise to stay away from debt, and it’s unwise to take on others’ debt.
I would concur with Curt's explanation that the Proverbs are not designed as absolutes. The book of Proverbs is a guidebook for godly conduct, consisting of practical principles for righteous living. In his commentary on the Proverbs, Jay Adams states, "...the proverbs warn, instruct, expose folly, point the way to wisdom, tell you what to expect in life (describing what it is like), show you how to live life in ways that please God and give you an idea of how things tend to work out without always being absolute about it."I agree with Curt's analysis and interpretation of Prov. 6:1-5, so I will not repeat what he has said. However, let me add a couple of other observations. In studying the practices of lending that were permitted and not permitted under the Law, it is clear that there was to be no interest charged to a poor person. But it was permissible to charge interest to others. However, usury (the charging of exorbitant interest rates) was prohibited. In Nehemiah 5, there is discussion of the people mortgaging their houses, fields, vineyards, etc. in order to buy food. And in verses 10-11, Nehemiah orders the rulers to stop charging usury to the people which was apparently 1% per month (12% per annum). Just like today, if someone had a mortgage that they were paying 12% APR on, we would all agree that it was exorbitantly high, particularly when mortgage rates are around 4% right now.My point is that many commentators believe Prov. 6:1-5 is warning against cosigning for someone on a loan on which the interest rate is so high as to be usury and you find yourself trapped by the agreement. Notice the conditional aspect in verse 2: "if you have been snared." But if a parent is financially capable of assisting their child in obtaining a student loan or an auto loan or an apartment lease agreement by cosigning for them, and the interest rate is low and affordable, then I do not believe Proverbs is absolutely prohibiting them from doing so. However, there is still the warning that something might go wrong and the parents would become responsible to pay back that loan, and then they may become trapped by their agreement to pay. In such cases, Proverbs advises them to plead with the creditor to release them from the agreement or modify it so as to be affordable.Another interpretation of this passage is that it is warning against making rash agreements to become surety for another which may trap the individual in something they haven't really thought through. Since the Proverbs are written to young sons as a means of instruction, this would warn young men of the danger of making rash agreements that they have not thought through or about which they have not received any wise counsel. Charles Bridges, one of the most famous commentators on the Proverbs, points out that there are some examples of becoming surety for another that were apparently okay (Reuben and Judah for Benjamin in Gen. 42:37, 43:9, 44:32-33; Paul for Onesimus in Philemon 18-19). So while we think of surety as applying to financial arrangements, the Scriptures do not carry that limited meaning or understanding. The concept of surety is that of a guarantee to be liable for someone else, whether for his debts, damages, or default. To bring it up to today, a parent who carries their child on their auto insurance policy has agreed to become the surety for that child's actions while driving the family vehicle. The principle of Proverbs would apply in that situation just like they do in your example of co-signing a loan. So if you are going to consistently apply your understanding that Proverbs is absolutely prohibiting surety for another (including your children), then a parent would be prohibited from including the child on their auto insurance policy (even though the insurance company requires such while the child is still living at home), merely because to do so is to be surety for that child. I'm not certain you would want to take the principle that far.So, as Curt stated, the principle of Proverbs is to avoid debt if possible. If a child or close friend needs the money and it is within the individual's ability, they should give them the money or they can loan the money to them at no interest. But if they don't have the money that is needed, and the child has not yet reached the stage in life where they have the ability to get the loan (or auto insurance) themselves, the principle from Proverbs is BE EXTREMELY CAUTIOUS ABOUT CO-SIGNING FOR ANYONE OR BECOMING SURETY IN ANY WAY FOR THEM, BECAUSE YOU MIGHT GET TRAPPED. But because the Proverbs are not absolute edicts, I do not believe you can take it to mean that co-signing or becoming surety in some other way is absolutely prohibited. It may not be wise (particularly if it is an apartment lease agreement), but it is not prohibited.