Lee, who played dead high school student Laura Palmer in David Lynch's cult Tv series, lost her home and was forced to sell her possessions to pay her medical bills after she was diagnosed with neutropenia, a rare blood disorder, in 2007.
The 47-year-old actress tells the London Evening Standard, "I've had to sell everything for financial reasons. From the age of 40, I went through illness for four and a half years. I tried to keep working through it as much as I could, but I was physically not able to do it as much and if you look sick it's hard to get a job. I did a few independent films, but there's no money in them. So everything was taken away - my health, my career, my finances. I had a little house, and I sold that and moved into a condo, then sold the condo... I kept downsizing and downsizing."
Lee even had to sell off all her keepsakes from Twin Peaks.
She adds, "I wish I still had them but I had to sell them too. I now live a very, very quiet, simple life in a tiny little guest house on somebody else's ranch. People always assume that, if you're an actor who's been on anything from which you're recognisable, that you're making all this money, and it's just not true."
News of Lee's financial troubles come just weeks after Lynch confirmed Twin Peaks is heading back to Tv, but the actress reveals she has not been asked to take part in the revival.