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THE BIG PICTURE
Co-ownership is risky. Joint tenants own the entire property equally. They cannot sell or transfer their share without consent of the other joint tenants. Joint tenants have a right of survivorship. A property held in joint tenancy is at risk for the debts of any one of the joint tenants. Tenants-in-common have more flexibility and are exposed to less risk, but there is no right of survivorship. Before buying something with another person, make a written contract detailing each owner’s rights. Talk to a lawyer. Co-borrowers and co-signers are equally responsible for repayment of the entire debt. The debt appears on their credit report and can affect their credit score. A guarantor is required to pay for another’s debt in the event of a default and can lose collateral put up for the loan. When entering into a co-ownership or joint debtor relationship, proceed with extreme caution.
PONDER AND PREDICT Hurricanes, fires, accidents… We don’t have much control over some loss-causing events. One thing everyone has control over is their personal behavior. How can bad behavior or poor lifestyle choices lead to financial loss or ruin? ______________________________________________________ ______________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ __________________________________________________________________________________ PRODUCT PREVIEW
DEBATE, PERSUADE, INFORM Share with Care!
What should people know about co-ownership and joint credit before they buy an asset or share a debt with someone else? Now that you know about major co-ownership and joint credit pitfalls, why not share your knowledge with the world? Go to Emaze (emaze. com) . Select a template and create a Share with Care! presentation with at least five slides advising potential co-owners, including engaged couples and buddy-buying friends, of the pitfalls of co-ownership and joint credit.
THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY 315
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