Dear Brothers and Sisters,
A $600,000 Debt from Helping a Boss.
I came across an article in The Straits Times on 25 October 2026, titled “A doctor end up with a $600k debt after acting as loan guarantor for boss’ clinic.”
The story sounds very familiar to me. More than 30 years ago, I signed a personal guarantee for my boss, who was also my friend, for a loan of $1 million.
Eventually, the borrower could not fulfil his obligations, and I had to take responsibility for the debt.
Haha! Looking back, that was an expensive lesson to learn!
At that time, I was not yet a believer. Had I known the wisdom of God's Word, I would have thought twice before signing that guarantee.
Today, I want to share this painful personal experience with you because I hope you will not have to learn the same lesson the hard way.
What Does the Bible Say About Guarantees?
Interestingly, the Bible speaks quite explicitly about the dangers of guaranteeing someone else's debts.
Proverbs 22:26–27 (NIV) says:
“Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.”
Think about this warning.
More than 2,000 years ago, God's Word was already cautioning us against putting ourselves at financial risk by guaranteeing another person's debts.
Why?
Because when we sign a personal guarantee, we may think we are merely helping someone. However, we are also accepting a potentially substantial financial obligation.
If the borrower fails to repay the loan, the lender may pursue us for the outstanding amount, subject to the terms of the guarantee and applicable law.
In other words, someone else's business failure can become our personal financial disaster.
We may not have received a single dollar from the loan, enjoyed any of its benefits, or had any control over how the money was used. Yet, we may still be held responsible for the debt.
Isn't that a sobering thought?
Even the Bible Tells Us to Be Careful!
Proverbs 11:15 (NIV) warns:
“Whoever puts up security for a stranger will surely suffer, but whoever refuses to shake hands in pledge is safe.”
Proverbs 17:18 (NIV) also says:
“One who has no sense shakes hands in pledge and puts up security for a neighbour.”
These verses may sound rather strong. After all, shouldn't we help our friends? Shouldn't we support people we trust?
Of course, we should love our neighbours and help those in need. But helping someone does not necessarily mean taking responsibility for their debts.
There is a difference between being generous and exposing ourselves to financial risks that we may not be able to bear.
We can encourage a friend, offer practical assistance, provide advice, or give financial help within our means. We can even contribute to someone's genuine needs without expecting repayment, if we are able to do so.
But signing a personal guarantee is different. It is not simply an expression of friendship. It is a serious financial commitment that may have consequences for us and our families.
Don't Let Friendship Override Wisdom
One of the biggest mistakes we can make is to believe that someone we know well will never get into financial trouble.
We may tell ourselves:
"He is my good friend. I trust him."
"She is my boss. Surely she will not let me suffer."
"He has a successful business. What could possibly go wrong?"
"I am only helping out with my signature. I am not actually borrowing any money."
Unfortunately, businesses can fail. Cash flow can dry up. Economic conditions can change. Even honest and hardworking people can encounter financial difficulties.
When that happens, friendship alone cannot repay the bank.
And when the lender comes calling, our good intentions will not automatically release us from our contractual obligations.
In my case, I learned this lesson through personal experience. I signed a guarantee for $1 million, and I eventually had to bear the consequences.
It was painful, but it taught me something important: we must not allow our emotions, relationships, or desire to please others to override the wisdom of God.
Are We Trusting God or Presuming on Him?
Sometimes, we may convince ourselves that taking a financial risk is an act of faith. We may even believe that God will protect us because we are helping someone else.
But faith does not mean ignoring the risks or disregarding God's warnings.
Proverbs 21:5 (NIV) says:
“The plans of the diligent lead to profit as surely as haste leads to poverty.”
God calls us to be diligent, thoughtful, and responsible in the way we manage the resources He has entrusted to us.
As Christians, we are stewards, not owners, of the resources God has given us. We have a responsibility to manage them wisely, including providing for our families and fulfilling our commitments.
First Timothy 5:8 (NIV) reminds us:
“Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.”
If we recklessly guarantee another person's debt and subsequently lose our savings or jeopardise our family's financial security, have we fulfilled our stewardship responsibilities?
We may have intended to help a friend, but our decision could end up hurting the very people God has entrusted to our care.
This is why biblical wisdom matters. It helps us look beyond our immediate intentions and consider the possible consequences of our decisions.
My Advice: Think Very Carefully Before Signing
Based on my own painful experience and the wisdom found in Scripture, here is my advice:
Do not casually sign a personal guarantee for anyone, even someone you know very well.
Not for your boss.
Not for your business partner.
Not even for your closest friend.
If you are ever considering signing one, understand the legal and financial implications fully. Seek independent professional advice, assess whether you could realistically afford the entire guaranteed amount, and consider what the consequences would be for your family if the borrower defaulted.
If you cannot bear the potential loss, do not sign.
Remember, you can be a good friend without becoming someone else's guarantor.
You can love someone without assuming their financial liabilities.
And you can help someone without putting your own family's financial future at risk.
A Painful Lesson, but a Valuable One
Looking back more than 30 years, I wish I had known the wisdom of Proverbs before I signed that $1 million personal guarantee.
Perhaps I would have made a different decision.
But I am thankful that God's Word provides wisdom to guide us in the financial decisions we face today.
Sometimes, we learn through painful experiences. At other times, we can learn from the experiences of others and, more importantly, from the wisdom God has already given us in Scripture.
Why pay a million-dollar price to learn a lesson that we could have learned by reading God's Word?
My dear friends, please remember this: A signature takes only a few seconds, but the financial consequences may last for years.
Before you sign on the dotted line, stop and think.
Is this wise? Can I bear the consequences? Am I protecting the family God has entrusted to me?
Above all, are my decisions guided by God's wisdom or by my emotions?
Let us not confuse being helpful with being financially reckless. May we learn to love others generously while managing God's resources faithfully.
After all, biblical financial stewardship is not about how much money we can accumulate. It is about how faithfully we manage what the Lord has entrusted to us.
Blessings,
David Poh
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