Does a conservatorship form of financial counseling exist?

September 10, 2008 5:08 PM

Is there a such a thing as a voluntary financial conservatorship that I could convince someone to sign up for?

There is someone in my life who is terrible with money and needs help. This person is not elderly and does not have dimensia, she just cannot handle her own finances. Is there a financial counseling type service where this person could sign over her accounts and paychecks to a service that, for a fee, will pay her bills and debts for her and issue her an allowance for groceries and whatnot from the excess? I don't know anything about debt relief/credit counseling type places, so any information would be helpful. Also, the names of reputable companies that offer this service would be appreciated, if this service does exist. She can't just set up automatic bill pay. If she retains any control over her finances, the problems will continue. I am not prepared to do this myself, so that is out. It would have to be a service that would do it for her. Thanks.

posted by anonymous to Work & Money (4 answers total)

It's called a trust, and really, it usually works out terribly unless you have the right trustee. It should also be limited in years. For instance you can make a banker whom you trust with your best interests the trustee of your accounts for say seven years.
posted by caddis at 5:23 PM on September 10, 2008

More specifically, what you're looking for is a spendthrift provision. But wouldn't a little self discipline be better in the long run?
posted by leotrotsky at 8:38 PM on September 10, 2008

The person you're talking about might want to try to find a local, legitimate non-profit debt counselor. It's less intense than what you're talking about, but I know people who it's been immensely good for--who had been irresponsible and had no idea how to get out from under. A good debt-counselor service should negotiate lower rates with creditors.

They take full account of your expenses, and then they work out an arrangement where you pay them, and they pay the creditors on a (usually) five-year plan. Usually, though, programs require that you keep entering bills into a system or faxing / forwarding your bills to them. If you open new credit, you're out, though--which if someone's a compulsive spender, might not be a good idea.

It's kind of like financial therapy--the person has to be willing to go a little more than half-way, but they will make it clear what needs to be done, and help plan it out.
posted by LucretiusJones at 8:38 PM on September 10, 2008

Third party payee agencies like what you are describing exist for disabled people collecting SSI/SSDI; the third party acts as "representative payee" and uses the client's funds to pay for necessities, and then returns the balance. Third party programs exist for situations where there is a volatile family relationship where the disability receiver has a history of violence towards their payee, or in the reverse situation where the family has financially exploited the disability receiver.

Just an FYI, should the person in question go from a state of financial instability to disability in the future.
posted by The Straightener at 9:06 PM on September 10, 2008