Helping a Daughter with Uncontrollable Debt

When a relative has a disability, the law can sometimes help.

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Dear Alpha Consumer,

Our daughter, 27, has suffered with Asperger's syndrome her entire life and due to this disability she does not understand the difference between a $400 debt and a $10,000 debt. She also has trouble obeying instructions and resistance to authority and short of hiring a private investigator to watch her every move, we cannot control her actions. She has been out of work for over 13 months and during that time she managed to accumulate $11,000 in debt. She knows this was wrong, yet we don't believe she realized how serious the amount became because she also tends to buy everything she looks at, including the latest in cell phone technology.

We are going to attack that starting with Debtor's Anonymous, followed by counseling and therapy if necessary, but do you have any advice on how I should go about dealing with this? Do you know of something legal we as parents could do to keep her from opening any further credit?

It sounds like you are taking the right steps to get control of the situation, and the law does empower you to some extent. While it sounds like you might need a lawyer to help you with the details, here is some advice, reprinted from a blog I wrote last year in response to a wife dealing with debt created by her husband, who suffers from dementia:

This is a tough situation, and to stop it from getting even worse, you will need to act quickly.

I asked Gail Cunningham, senior director of public relations for the National Foundation for Credit Counseling, for advice. In addition to opting out of credit offers, she suggested opening up a post office box and redirecting mail to it, which will stop your husband from seeing the offers.

Cunningham added that you may want to consider paying around $15 a month for a credit-monitoring service, which will alert you every time there is activity on your account. Another option is asking the credit bureaus to flag your account for 90 days at a time for no extra charge. That means you will be alerted if anyone tries to open a new line of credit. But these measures will only let you keep closer track of your husband's activities; they won't stop them.

The next step is more extreme, but, given the situation, may be necessary. Executing durable power of attorney or establishing guardianship will allow you to make financial decisions on behalf of your husband, explains David Goldman, a Florida estate-planning attorney in Jacksonville. Both these options require a lawyer, which can be expensive, but it may enable you to get some of your long-lost money back. (Whether you are able to reclaim any of the spent money will depend on company policies and how much time has lapsed.)

If you do go that route, then let the credit card companies know so that they shut down the existing accounts and don't allow new ones to be opened. If your husband frequently spent money with any particular retailers, you should also alert them to the problem and prevent them from allowing any more purchases. If you do need to dispute any new charges, be sure to do it as soon as possible. Some cards require charges to be disputed within 60 days, or they won't refund the money, Goldman warns.

One of Goldman's colleagues used an emergency guardianship to get back tens of thousands of dollars when his mother bought jewelry after watching television ads. He called the company and said she wasn't competent to enter into those transactions; the company said that if the jewelry was sent back, they would return the money.

Good luck as you deal with this challenging situation.