One aspect of personal finances that is often overlooked is the mental health of the person having difficulty. However, there are a number of conditions that can cause people to spend frivolously. One such problem is bipolar disorder – a condition that causes sufferers to experience extreme bouts of euphoria and depression.
Understanding the Problem
The accumulation of bad debts as a result of bipolar disorder is often overlooked. Generally, mental health isn't treated with the same respect that physical health is, leading to many people misunderstanding the issue. However, bipolar disorder is a very real problem that can lead to significant financial problems like bankruptcy in sufferers.
Sufferers of bipolar disorder may have particular problems in managing their budget. When they are in the middle of a manic (or 'high') phase, they can feel euphoric and willing to spend all of the money they have. Their confidence level is much higher than normal and they have an adrenaline-fuelled recklessness that can lead them to excessive spending sprees.
The irrational financial decisions taken feel normal during the manic phase; however, once the high is over, the implications of their decisions come crashing home. During a low phase, depression is common and sufferers are typically unable to face the consequences of their actions. Bills are left unopened and debts can quickly accumulate without the sufferer understanding the extent of their actions.
How Lenders Can Help
While the specific legislation varies from state to state, there are a number of guidelines that lenders are given in order to assess applications submitted by sufferers of bipolar disease.
Typically, these guidelines aren't strict in nature; rather, they are designed to give the lender an understanding of the applicant's situation and how they can approach the issue. While the codes generally do offer some advice designed to manage lenders' risk, they are also in place to ensure some flexibility is allowed with the applicant.
It is important that lenders don't completely shut off bipolar sufferers as they should be allowed the same sources of credit as others. However, it is also important that lenders do not allow people with a mental health problem to dig themselves under a mountain of debt. One of the best ways that lenders can do this is by allowing an "assessment period", whereby the lender gives the applicant a period of time to find supporting information. This allows the applicant time to consider whether their credit is necessary and gives the lender time to fully assess the application.
Lenders also have to be considerate when a mental health sufferer misses a payment on their debt. In most cases, bad debts would be transferred to a third party collection agency who is legally authorized to chase up bad debts. However, this approach could bring unnecessary stress to the debtor and should be avoided at all costs.
How Sufferers Can Get Out of Debt
Getting out of the red and into the black can be extremely difficult, particularly if the debtor is suffering from an existing mental health condition. As such, it's important that debtors understand the steps available to help them get out of a bad situation.
Friends and family should be the first source of support as they will be able to help sufferers on a day-to-day basis. Creating weekly checks and budgets, they will be able to monitor the individual's spending sprees and notice any large transactions. While this may seem like a restriction on liberty, it is essential that a third party is involved to help control the individual's spending habits during a manic spree.
This third party doesn't have to be a close friend of family member. Nowadays, there are many therapists who are trained in managing bipolar disorder. They may be able to help one-to-one or may suggest a local support group that can bring individuals together to discuss their problems.