Student Workbook (PDF file, 3.46 MB) - Oklahoma Department of ...

4. Michael and Patrick are roommates. They are good friends, but
are very different. Michael has a fi nancial plan and is usually
pretty good about sticking to it. He has about $5,000 in savings.
Patrick fi nds it impossible to save money and is often behind on
his bills. When Patrick needed a car, he found that he did not
qualify for a loan on his own, so he asked Michael to co-sign for
him. A year later, the lender contacted Michael and told him that
Patrick had missed several car payments. The lender demanded
that Michael pay $1200 immediately to get the loan up to date,
and then start making the payments of $300 per month, since as
a co-signer, he is legally responsible for the entire loan. When
Michael confronted his friend about the car, Patrick confessed
that he had also not paid their utility bills for the last two months,
even though Michael had given him his share of the money, so
they owe $300 in overdue bills. What could Michael have done
to prevent this? What can he do now?
UNIT 1 MANAGING MONEY 35