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Protect yourself when a loved one can’t manage money

On Behalf of | Apr 10, 2024 | Debt Relief

The impact of mental illness is something that every member of a Pennsylvania family may feel. When a loved one struggles with issues beyond his or her control, it is an issue that could affect everything from how your family functions in daily life to your long-term finances. In some cases, mental illness impacts a person’s ability to make sound decisions and manage money, and this can lead to overspending, accumulation of debt and a range of other issues that may have negative long-term consequences.

One of the effects of bipolar disorder is poor impulse control and periods of mania that can lead to compulsive spending without an understanding of the consequences. Without your knowledge, your loved one could accumulate debt at a rate that you cannot maintain, eventually necessitating consideration of measures such as bankruptcy. It may also be necessary to consider steps that can allow you to regain control and protect your finances from future misuse.

Practical steps for your protection

There are certain things you can do that will allow you to protect your finances from misuse and abuse by a loved one during a manic episode. Prevention and planning can help you shield your interests and ensure that you have the resources you need to provide for your family. Some of the things you can do that will help you accomplish this goal include:

  • Keep detailed spending records so that you can easily see when there is a sudden increase in unnecessary spending.
  • Create two separate bank accounts so that your loved one does not have access to your personal funds or all of your family’s funds.
  • Create a power of attorney for your finances so that, in the case of incapacitation, no one can misuse your funds.
  • Put limits on your credit cards so that your loved one cannot charge excessive amounts without your knowledge.

While these steps can help you protect yourself and your future interests, you may still have accumulated balances you need to address. In some situations, with excessive debt, bankruptcy offers a way to deal with these balances and eliminate some types of debt. It may be beneficial to speak with an experienced professional who can assess your situation and explain if bankruptcy could be the best way for you to pursue a better and stronger financial future.