Repeated almost exactly at 27:13. The Hebrew carries a scribal variant in the second line.
Quick answer
If a man has cosigned for someone he does not know, get collateral before you lend to him. The verse is practical advice to a third party, not a rule about debt.
Read both lines
This is the surety warning from a new angle. Everywhere else the book tells the reader not to become a guarantor for a stranger; here it tells him how to handle someone who already has. A man's outer garment was his blanket, which is why taking it in pledge was serious and why the Law required returning it before sundown (Exodus 22:26-27). So the instruction is deliberately uncomfortable: this man's judgment has already been demonstrated, so do not extend him trust on his word. The received text preserves two readings of the second line, one plural and one feminine singular, and the NKJV follows the second.
Related: Proverbs 27:13 · Proverbs 6:1–5 · Proverbs 11:15 · Proverbs 17:18
New King James Version®, Copyright © 1982, Thomas Nelson. All rights reserved. Full copyright information. Scripture provided by API.Bible.
Go Deeper
If this verse has been used to put weight on you that it was never carrying, ask about it directly.