The modern legal remedy for spendthrifts is usually
bankruptcy. However, during the 19th and 20th centuries, a few jurisdictions, such as the
U.S. states of
Oregon and
Massachusetts, experimented with
laws under which the family of such a person could have him or her legally declared a "spendthrift" by a
court of law and placed under a
court-supervised guardianship. In turn, spendthrifts were treated as lacking the
capacity to enter into binding
contracts. Even though such laws made life harder for
creditors (who now had to bear the burden of verifying up front that any prospective debtor had not been judicially declared a spendthrift), they were thought to be justified by the
public policy of keeping a spendthrift's family from ending up in the
poorhouse or on
welfare. As the
Supreme Court of Oregon explained, the purpose of the statute is to protect the spendthrift "against his wasteful and vicious habits which expose him or are likely to expose him or his family to want or suffering or to cause any public authority to be charged for any expense for his support or that of his family". Such laws have since been abolished in favour of bankruptcy, which is more favourable to creditors.
Receivership is another equitable remedy for a spendthrift, by which a state-court-appointed
trustee or
attorney manages and sells the property of the debtor in default on debts. In
conservatorship, a
fiduciary handles both the personal affairs and paying the debts of an incapacitated person. ==References==