Arizona residents may turn to Craigslist to sell furniture or find odd jobs to earn extra cash, but they may not be aware that borrowers may also turn to this popular website to find co-signors to qualify for a loan.
Borrowers who do not have good enough credit to qualify for a loan on their own may utilize this option. One of the reasons their credit score may be lower is because they declared Chapter 13 bankruptcy to gain control over their financial life -- under Chapter 13a filer makes court supervised payments linked to their ability to pay over a period of time.
After filing, they may fear their credit score will be lower and they will not qualify for a loan. The Craigslist option may look attractive to them, as they can advertise to pay some money to anyone who agrees to co-sign on their loan. In fact, there are many advertisements along these lines in the 'Financial Services' section of the website.
However, those who have advertised claim that even though people respond to their advertisements and offer to co-sign, they are not sure whether the responder is a scammer or is genuine. In fact, they often ask for the cash payment up front or personal information -- both of which may lead to losing money and to identity theft, according to the president of a consumer education organization.
Spokespeople for the website have not yet commented on this practice and if it is actually permitted on the website or not.
Before Arizona residents take risky steps like this, they should be aware that there are other options available for them -- it is possible to rebuild credit slowly and steadily after declaring bankruptcy. Small steps, such as paying bills on time and applying for a credit card are better than risking losing everything online. People should not hesitate about filing for bankruptcy because of fear that they will not be able to get a loan in the future -- these people should take whatever steps necessary to control their financial life and be assured that within a few years of filing Chapter 13, they may qualify for conventional financing on their own.
Source: CNN Money, "Desperately seeking co-signors- on Craigslist," Blake Ellis, Nov. 8, 2012