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Can a mentally incapacitated person enter into a lending or credit card agreement

Houston, TX |

an adult mentally retarded family member has opened several credit cards and maxed them out without any of us knowing about it until now. What is the liability of the family or the mentally retarded person. She has no job and no ability to work nor any income other than ssi

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Attorney answers 2


Generally, a mentally incapacitated person is not legally capable of forming a binding contract. Even if she was deemed able to form a credit card contract, Social Security income is NOT subject to judgment lien and can't be garnished to satisfy a judgment.


I don't disagree with Lu Ann Trevino's answer, but a few additional points occur to me.

It's important for any lawyer advising you to know the exact status of the mentally handicapped individual. It matters quite a bit, for example, whether there was already a legal guardianship in place when the credit card applications were filed.

Lu Ann Trevino's answer assumes, I think, that the mentally handicapped person has no other substantial assets or income OTHER than social security disability payments. If that's true, then it's possible that neither he/she nor others (like the guardian and/or family members) need be too concerned about the consequences of property being seized and auctioned, or wages being garnished, or the like EVEN IF one or more of the credit card companies gets a judgment. They may not be able to enforce such judgment(s) under those circumstances.

However, depending on the other circumstances, the guardian and/or family members may want to fight these claims anyway. The reason is that you may not want to give up the defense of legal incapacity. If you simply ignore the claims and permit judgment to be entered against the handicapped person by default, then there's no way for anyone in any later proceedings to claim that the handicapped person did not owe the full amount, plus interest and attorneys' fees and court costs. And my concern is that faced with an uncollectable judgment, the credit card companies may then start looking for other people to sue, even if that means fairly novel legal theories.

Ordinarily, for example, I would not expect someone who lacks legal capacity to enter contracts because of a mental disability to be able to apply for and then run debts up on credit cards without his/her guardian and/or family NOTICING and intervening. The credit card companies might claim that such persons were negligent, and that it was only as a result of that negligence that they ended up ever issuing the cards. In defending against such a claim, you might not want to be "stuck with" the underlying judgment.

I wouldn't just assume, then, that there's no problem here and that you can safely ignore the credit card companies' demands and threats of suit. I'd suggest you consult more formally with a flesh-and-blood who can more carefully consider all of the circumstances, including those you haven't described in your post here. You may well be able to find someone who will offer you a free initial consultation to help you decide whether you need to hire counsel.

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