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“He who passively accepts evil is as much involved in it as he who helps to perpetrate it. He who accepts evil without protesting against it is really cooperating with it.”Martin Luther King

What is “Co-Signing”?

Co-signing is accidentally or inadvertently agreeing to something that you don’t actually agree with. How often do you co-sign bad behavior because you’re too scared, too lazy or too greedy to speak up? You can do this by simply not interrupting a conversation in order to take someone to task about something they’ve said. In not speaking up, you have agreed to all points in that conversation by default.

How often have you been in a conversation where you clearly disagree with what someone is saying? We often decide that it is not our business to interrupt or perhaps it’s simply not important enough to us. Therein lies the quandary: What is and what is not important?

In the context of financial obligations, “co-signing” refers to the act of signing a loan or credit agreement alongside the primary borrower, thereby agreeing to take on the responsibility for the debt if the primary borrower fails to make payments. When you co-sign a loan, you are essentially promising the lender that you will repay the loan in full if the primary borrower does not.

Key aspects of co-signing include:

1. Shared Responsibility: Both the co-signer and the primary borrower are equally responsible for the repayment of the loan. This means that if the primary borrower defaults, the co-signer is legally obligated to pay back the loan.

2. Credit Impact: The loan will appear on both the primary borrower’s and the co-signer’s credit reports. Consequently, the repayment history will affect both parties’ credit scores. Timely payments can benefit both parties, whereas missed payments can negatively impact both parties’ credit scores.

3. Risk for the Co-signer: Co-signing involves risk. If the primary borrower fails to make payments, the co-signer must take on the financial burden. This can strain personal relationships if the co-signer is a friend or family member of the primary borrower.

4. Difficulty in Being Released: Once you co-sign a loan, it can be challenging to be removed as a co-signer. Some loans have clauses that allow for the release of a co-signer under certain conditions, but this is not always the case.

5. Benefit for the Borrower: For the primary borrower, having a co-signer can be beneficial, especially if they have a limited or poor credit history. A co-signer with a strong credit history can help them secure a loan or get better borrowing terms, such as a lower interest rate.Co-signing is a significant financial commitment and should be considered carefully. It’s a gesture of trust and support for the primary borrower but comes with substantial financial risks and responsibilities for the co-signer.

Business Turnaround Specialist, Patrick Rettig The Rettig Corp, CEO

Business Turnaround Specialist, Patrick Rettig The Rettig Corp, CEO

Stop Co-Signing! Follow The Rettig Way

When I am working with a company, my comments may not be popular. When I am listening to people tell me how they should spend their money or how other people should act, I must speak up. If I allow (even if only by default), people to treat each other poorly and spend money irresponsibly, I do not deserve to be “America’s Turnaround Man.”

There are two ways in which I can fail my responsibilities and co-sign bad behavior:

  1. I can verbally agree to stay friends with my clients.
  2. I can choose not to comment, implying that I agree.

When people are angry, frustrated, and financially broken, they say all kinds of crazy things, and for the most part, even though they sound very convincing in their comments, they are probably just spewing hot air. They might even be looking for validation.

“Business owners may be searching for things that are not good for them, and these searches would indicate they need our services to avoid the very things they are searching for, such as “business debt, bridge loans, short-term loans, hard money loans, unsecured debt or even company bankruptcy … when businesses make the decision to solve their cash flow problems with debt, they need the Rettig Corp.” – Julie Rothgeb, CPA/CFO

Making Magic

As a turnaround man, it is critical that I intervene when behavior is clearly sending a client into further upheaval. Each of us has a responsibility to not co-sign behavior we are ultimately responsible for if it’s behavior that we know will cause harm.

When it comes to changing behavior, I have learned that one must know the truth of the situation. My job is to realign a chaotic situation and navigate a CEO out of harm’s way. Speaking the truth to the right person at precisely the right time is magic.

In my line of work, it is best that I do not share my opinions with people. It is imperative that I only share facts based on evidence. This is critical. You must pay attention to the facts alone when trying to find the correct path. Theories and generalities have no place in a corporate environment. They should be reserved for Starbucks or a late-night chat with a friend.

When dealing with the personalities in American finance, we need to absolutely do our homework and clearly know the strength and weaknesses of all the players involved.

Be the Change

There is an old saying, “You can only change yourself. You cannot change anyone else.” That is correct unless you are a CEO or a Turnaround person.

If you are in a fiduciary position and you hear something that is clearly incorrect based on fact, SPEAK UP! Lead, teach, and inspire those you oversee.

Co-signing failure, inconsistency, irresponsible, or other bad behavior is a sin against all manner of solvent and solid money, not to mention the fact that it is rude, uncaring, and inappropriate.

If you do not stand for truth, you stand for nothing — and you will yield just that.

Call me 760.662.9668

email anytime patrick@rettigcorp.com
Patrick Rettig, CEO The Rettig Corporation