I Co-signed For A Car and Now They're Going To Prison

Summary

Episode Summary: "I Co-signed For A Car and Now They're Going To Prison"

Podcast Information:

• Title: The Ramsey Show Highlights
• Host/Author: Ramsey Network
• Description: The Ramsey Show Highlights delivers a quick, daily dose of advice on life and money in under ten minutes. Featuring experts like Dave Ramsey, Ken Coleman, Rachel Cruze, Dr. John Delony, George Kamel, and Jade Warshaw, the show is part of the Ramsey Network and is available seven days a week.
• Episode Title: I Co-signed For A Car and Now They're Going To Prison
• Release Date: July 30, 2025

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Introduction

In this episode of The Ramsey Show Highlights, Frank shares a personal financial predicament that arises from co-signing a car loan for his brother-in-law. The discussion delves into the ramifications of co-signing, the emotional and financial toll it takes, and the expert advice provided by Dave Ramsey and George Kamel on resolving such situations.

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The Situation: Co-signing Gone Wrong

Frank begins by recounting his ordeal:

Frank [00:02]: "I have a brother in law who is just a big dumb animal and I love him dearly. And he came to me and says, hey, I got 20 grand I'm going to put down on a car, but I need help, obviously I need help. And I said, you got 20 grand? Okay, fine, I'll do it for you. So I co-signed for him."

Frank expresses regret over co-signing, describing his brother-in-law disparagingly, which underscores the strained relationship and the emotional weight of his decision.

Dave [00:27]: "Oh, your big dumb, your big dumb brother in law. That's what you said?"

Frank [00:30]: "Yeah."

George [00:30]: "You got in the mud with this animal, my friend. We can't tell the two apart. We don't know who's dumb and who's smart."

The candid exchange highlights the personal conflict and the financial risks associated with co-signing for someone who may not be financially responsible.

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Financial Implications and Emotional Impact

Frank outlines the dire financial situation that has unfolded:

Frank [00:49]: "I am in the process of either just letting this go into a voluntary repossession because I don't need it, I don't want it. And he's going away for a very long time on a vacation. An unwanted vacation."

Co-signing has led to a predicament where Frank faces a substantial car payment burden without the means to cover it, especially with his brother-in-law facing incarceration.

Frank [01:28]: "It's going to be an eleven hundred dollar car payment and goodness gracious."

The emotional toll is evident as Frank grapples with the consequences of his decision, compounded by his brother-in-law's legal troubles.

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Expert Advice: Navigating the Financial Quagmire

Dave Ramsey and George Kamel provide practical advice to Frank on mitigating his financial distress:

George [02:25]: "It doesn't get you out of it. And so it's going to be even worse if you do the repo. So you might as well control the variables here, here. And sell it for as much as you can. And then even, you know, take the cash as a stupid tax and go. All right. I owe 12 grand to get this out of my life. That's the only way out of this. That is going to leave you with the least amount of harm."

George emphasizes taking proactive steps to minimize financial loss, advising Frank to sell the car privately to recover as much as possible rather than letting it repossess, which would exacerbate his debt.

Dave [04:00]: "And you didn't."

George [04:06]: "You know what else proverb says? Oh, what is it? The woman who could find a virtuous wife and her. The heart of her husband safely trusts her, and he will have no life again. Oh, man. Frank. Yeah. Ouch, man."

The discussion shifts to the importance of communication and trust within Frank's marriage, especially regarding financial decisions. George underscores the broader personal implications of financial missteps, affecting family dynamics and trust.

Dave [04:28]: "Total money makeover event you went to in 2003 didn't really stick. Did it for Frank?"

Frank [07:31]: "No, no. Well, it did. It did for. It did for a long time. And then, you know, I kind of, you know, you wander your way back into debt, you can't wander your way out."

Frank reflects on past efforts to manage his finances, acknowledging that while he made progress initially, he struggled to maintain financial discipline, leading to his current predicament.

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Solutions and Moving Forward

The experts guide Frank towards actionable steps to resolve his financial issues:

George [06:11]: "So it's probably, you know, 10 to 12,000 bucks."

George [06:20]: "So it's going to be. Well, I'm, I might. I've got five closings this week, so."

George [06:36]: "Oh, good. Okay. Let's hope that if that doesn't work out, you can go to your local credit union and take out a personal loan for the difference and then clean that up fast."

Frank mentions his available liquid assets and upcoming financial activities, indicating a pathway to address the debt. George suggests securing a personal loan from a credit union to cover the shortfall, emphasizing the importance of swift action to mitigate further financial strain.

Frank [07:04]: "Never co sign. I'm going to write, I'm writing that on the back of my truck right there. Don't sign for anyone."

Frank vows to adopt a more cautious approach in the future, recognizing the perils of co-signing based on his painful experience.

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Key Takeaways

1. The Risks of Co-signing: Co-signing a loan can have severe financial repercussions, especially if the primary borrower defaults or encounters legal issues. Frank's experience underscores the importance of thoroughly assessing someone's financial responsibility before agreeing to co-sign.

2. Proactive Financial Management: George and Dave stress the importance of taking control of the situation by selling the asset privately to recover funds and mitigate debt, rather than allowing it to go into repossession, which can worsen the financial burden.

3. Communication and Trust: Financial decisions significantly impact personal relationships. Open communication with spouses and partners is crucial to ensure mutual understanding and support in managing finances.

4. Leveraging Financial Resources: Utilizing available resources, such as personal loans from credit unions, can provide the necessary funds to address outstanding debts and prevent further financial distress.

5. Learning from Mistakes: Frank's commitment to never co-sign again serves as a valuable lesson in financial responsibility and the importance of safeguarding one's financial well-being.

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Conclusion

In this episode, Frank's challenging situation highlights the potential dangers of co-signing loans without fully understanding the associated risks. Through the insightful advice of Dave Ramsey and George Kamel, listeners are reminded of the importance of financial prudence, proactive management, and strong communication within personal relationships. Frank's journey serves as a cautionary tale, emphasizing that while mistakes can be costly, they also offer valuable lessons for future financial decisions.

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Notable Quotes:

• Frank [00:02]: "I have a brother in law who is just a big dumb animal and I love him dearly."
• George [02:25]: "It doesn't get you out of it. And so it's going to be even worse if you do the repo."
• Frank [07:04]: "Never co sign. I'm going to write, I'm writing that on the back of my truck right there. Don't sign for anyone."
• Dave [08:03]: "That's right. Amen."

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This episode serves as a profound reminder of the intricacies involved in financial decisions and the far-reaching impacts they can have on one's life and relationships. By sharing Frank's story, The Ramsey Show Highlights provides listeners with invaluable insights into managing and overcoming financial challenges.

Transcript

[Frank]

Brought to you by the EveryDollar app. Start budgeting for free today. So I have a brother in law who is just a big dumb animal and I love him dearly. And he came to me and says, hey, I got 20 grand I'm going to put down on a car, but I need help, obviously I need help. And I said, you got 20 grand? Okay, fine, I'll do it for you. So I co signed for him.

[Dave]

Oh, your big dumb, your big dumb brother in law. That's what you said?

[Frank]

Yeah.

[George]

You got in the mud with this animal, my friend. We can't tell the two apart. We don't know who's dumb and who's smart.

[Frank]

And all I can hear in the, in the background when I got done doing this is that is Dave saying and reciting scripture to me saying one who signs debt for another is stupid.

[Dave]

Yeah, that's right.

[Frank]

That sounds like I'm like, why did I do this?

[Dave]

God.

[Frank]

Yes, God said it. So now I'm, I'm in the process of either just letting this go into a voluntary repossession because I don't need it, I don't want it. And he's going away for a very long time on a vacation. An unwanted vacation.

[George]

Is he going to prison?

[Frank]

Yes, he is.

[George]

Oh boy.

[Frank]

Okay. Anyway, yeah, so now it's an eleven hundred dollar car payment and goodness gracious.

[George]

What kind of car was this?

[Frank]

It was a Chrysler, brand new. Chrysler 300. Yeah.

[George]

Can you not sell it?

[Dave]

Sell it?

[Frank]

Well, I can sell it. So either way I can sell it. But right now the buyout is 62 on it and to sell it it's going to be around maybe 50.

[George]

Is that private party or is that trade?

[Frank]

Yeah, that's, that's private party. I listen to your show all the time, George.

[George]

Okay, so you're going to be. You're 12 underwater. He obviously has no money. He's. He's going to prison. And you, do you have money?

[Frank]

I do, but I don't. I don't want to do this. I, I don't want.

[George]

You already did it, my friend. It's just going to add insult to injury. You understand what's going to happen with the repo, right? They're going to sell it at auction for like 15 grand and you're still going to owe the difference.

[Frank]

Yeah.

[George]

It doesn't get you out of it. And so it's going to be even worse if you do the repo. So you might as well control the variables here, here. And sell it for as much as you can. And then even, you know, take the cash as a stupid tax and go. All right. I owe 12 grand to get this out of my life. That's the only way out of this. That is going to leave you with the least amount of harm.

[Frank]

Okay? Because it's. It's. It's currently the. The. What we owe on it right now to get this up to. Is like $5200. So it's up for repossession right now. So I am. I am in South Carolina. This car is in Arizona. So I'm trying to work with my.

[George]

Are you saying you're behind on payments by five grand?

[Frank]

Yes. So with penalties and taxes and this and that. So this. They're out. They're gonna find this car eventually. If I don't come up with it.

[George]

You'Re gonna have Dog the Bounty Hunter at your door, man. I would not go through with this. This is not the way you want to go, Frank. So I. Do you have five grand to get current on payments?

[Frank]

I do, but my wife won't give it to me.

[George]

Oh, boy. Does she have control of this money or she just super angry?

[Dave]

She's mad at you. She's like, don't take that out of our.

[George]

Okay, well, it's gonna cost you guys as a family a whole lot more than five grand if you do it the wrong way. And so she's gonna be. You're gonna be sleeping on the couch. You might as well live in this car at this point.

[Frank]

Yeah, that's kind of. That's kind of what I was thinking. That's kind of where we're at right now. Because, you know.

[Dave]

Did you do it without her? Without talking to her?

[Frank]

No, I did it with talking to her. And she said, don't.

[George]

Oh, no. And you didn't.

[Dave]

You know what else proverb says? Oh, what is it? The. The woman who could find a virtuous wife and her. The heart of her husband safely trusts her, and he will have no life again. Oh, man. Frank. Yeah. Ouch, man. That. This hurts. So you got to go to her with all humility and say, I'm.

[George]

I'll make it up to you.

[Dave]

I'm so sorry. But this. But this. But George's point. For real? For real, Frank, you guys are going to end up paying more if this ends up getting repoed. So it hurts at the front end to pay it all. Get rid. Do it. You know, pay the. Pay the backlog, sell it, pay the difference. All of that is going to be so much less painful than the dragging through this repossession and then having to end up owing even more on the back end. So go ahead, rip the band aid off.

[Frank]

Yeah, they could sell this car for 30 and now I'm into it for 30. I.

[George]

And you'll be lucky if they sell for 30. I mean, they're going to sell it for bottom dollar because they don't give a rip and they're going to put you on the hook for the difference plus fees. And so I would get current as fast as possible. Sell it as fast as possible.

[Dave]

How long ago did you co sign it?

[Frank]

Probably almost a year ago.

[Dave]

Okay. Yep.

[Frank]

And I've been trying to get out of it for the past year and a half. You know, he's like, oh, I'm going to get it. I'll get it re. You know, get it in someone else's name or I'll take care of it. I'll get you off this in six months, Frank. No, no worries.

[George]

Yeah, if a sketchy lender doesn't trust you to give you a loan, maybe you shouldn't trust that person, you know what I mean? So does your brother in law have any money that you can get access to? If he's going to prison, he might as well leave you with a parting gift.

[Frank]

No.

[George]

Sounds like he was broke to begin with though. Yeah, I figured.

[Frank]

Yeah, he was. Yeah, he was broke to begin with and just. Yeah, big mistake. Big mistake.

[George]

So, well, how much money do you have liquid between savings, Anything else you could sell.

[Frank]

So it's probably, you know, 10 to 12,000 bucks.

[George]

So you don't even have the money to make good on this deal?

[Frank]

No, I mean I don't have the money to, to like you can get.

[George]

Current on payments, but you don't have the difference in cash?

[Frank]

Yeah, no, I don't have the difference in cash. So it's going to be. Well, I'm, I might. I've got five closings this week, so.

[George]

Oh, good. Okay. Let's hope that if that doesn't work out, you can go to your local credit union and take out a personal loan for the difference and then clean that up fast.

[Frank]

That's my, that was. I'm. I've got an appointment with the credit union tomorrow.

[George]

Okay, good, good. I hope they're kind to you and I hope you can clean this mess up. And I'm glad you learned the lesson and I hope everyone in America did. To never co sign for anything.

[Frank]

Never co sign. I'm going to write, I'm writing that on the back of my truck right there. Don't sign for anyone.

[Dave]

Never, ever.

[George]

Are you out of debt, Frank?

[Frank]

No, that's, that's, that's another 45 minute conversation. But I've got my notepad here of everything I've got and man are that.

[Dave]

Total money makeover event you went to in 2003 didn't really stick. Did it for Frank?

[Frank]

No, no. Well, it did. It did for. It did for a long time. And then, you know, I kind of, you know, you wander your way back into debt, you can't wander your way out.

[George]

So he knows the quotes.

[Frank]

Yeah, I've got them all, Believe me.

[George]

Frank's got the bumper sticker.

[Dave]

Oh, Frank said you can get back on the horse. We believe in you, Frank.

[George]

We are the number one reason I don't co sign for anyone, Rachel. I don't know if they're going to be a future criminal. Are they going to be now added to my list of fears? Well, I don't want to hitch my wagon to somebody's.

[Dave]

Unbelievable. I know. All right, good. Learn from Frank. If you Hear Smart Advice 20 years ago, take it.

[George]

Take it the first time and listen to your virtuous wife.

[Dave]

That's right. Amen.

[Frank]

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