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Filed under: Debt

This is the first of a new weekly column by WalletPop’s resident debt expert, Lita Epstein.

Two readers wrote in recently about situations where they tried to help out relatives. One was a mother who co-signed a student loan so her son could go to college. The second was a woman who took out an equity line for a relative so he could start a business.

In both cases the people who wanted the loan balked on making the payments and the women who thought they were doing a good deed are now screwed. They will have to pay off the debt if they want to keep their good credit rating and in one case, her home.

I hear this story over and over again from people thinking they are trying to help a friend or relative and instead end up with a mound of debt and often destroyed credit history. Don’t co-sign on a loan or agree to take a loan for someone else who isn’t able to qualify for that loan on their own. Often the reason is that they’ve already got a low credit score because they haven’t been paying their bills.

There is one exception to that rule. If parents want to help their child get a start in life and assist them with getting their first loan, whether it be a car loan, a student loan or a credit card, then they should do so. But if you do decide to help, be sure that your…