How Do I Help My Sister With Debt and Schizophrenia?


Dear Steve,

My sister Ruth was diagnosed a schizophrenic after my mother passed away. She has since then been to jail 2 times and gotten into a crazy amount of debt. She has had hallucinations and fits and paranoia even against me.

During her mental break during one of her episodes she ran away from home. She bought a car somehow and became homeless. Her car was towed and the police did not believe her when she said her car was stolen.

She has been in a mental facility several times and her car is now on lien sale from the tow company. She is in no way of stable mind and is not able to manage her money herself. she lives on SSI from mental disability.

Is there any way to get her out of debt? She is really sick I mean her episodes are really bad. It’s hard enough to get her to groom herself or use the restroom. We finally have found medicine that is getting her more stable but there is no way she can make sound decisions about money.

Is there a way to reduce the debt?



Dear Help!

It is entirely possible to help your sister as she struggles with her debt and mental health issues.

You may have read some of my other posts on bipolar and debt. The presenting mental health issue is less important than the financial consequence it can cause because I’m a debt expert, not a mental health expert.

All forms of mental illness can lead someone to be unattentive, manic, depressed, or simply unable to be of sound mind.

You have a couple of primary logical choices.

First, you could go to battle with all the creditors and attempt to make the argument your sister was no mentally competent to enter into the contract for credit so the contract should be voided. Good luck with that approach. Expect to get pushback.

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The fastest and least expensive option here is probably to find a good local bankruptcy attorney who can file a Chapter 7 bankruptcy. It will instantly close the door on all the debt and liabilities. You can then put a freeze on her credit which will go a long way to preventing her from taking out more major credit in the future.

So following this advice you can get her out of her past problem debt quickly and go a long way to preventing the easy access in new debt when you are not around. Her debt will go to $0.

However, a credit freeze will not stop her from getting credit from a lender who does not rely on credit bureau reports.

The only other step you could take is to pay for some automated credit report monitoring services to watch all three major credit bureaus and notify you if there is new activity on the credit reports.

If you can have your sister’s doctor make a note she is not competent to make financial decisions it might go a long way to raise that argument the next time there is a financial surprise.


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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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