The main reason of over-indebtedness
The Institute for Financial Services eV (iff) based in Hamburg presented its 2015 overindebtedness report at the beginning of this month. The investigation report was published for the tenth time. A total of 57,229 households from all federal states were surveyed. The aim was to provide a reliable picture of the over-indebtedness of those households and people who visited debt counseling centers in order to receive help there.
According to the report, there was no decline in over-indebtedness in the Good Finance according to the report, according to the experts of the iff. With a total of around 3.36 million over-indebted households, an increase of around 60,000 compared to the previous year can be reported. The average debt is now $ 32,500 and has also increased slightly compared to the previous year. Banks account for over 50% of all claims.
The main reasons for overindebtedness are unemployment, income poverty, failed self-employment, divorce, irrational consumer behavior and illness. It should also be noted that overindebtedness often solidifies. A separate evaluation of so-called garnishment protection accounts at Credit bureau showed that a large number of these accounts existed over 4 years. The number of those who rely on such protection is now also in the millions.
Protection against over-indebtedness
According to a decision by the federal cabinet in July 2015, banks should in future be obliged to offer overindebted customers alternatives to their current overdraft facilities. Bank advisers will therefore be given a greater responsibility and, in addition to making cheaper loan offers, should also point out the helpful work of debt advice centers in the future. However, this obligation only arises when there is a high level of debt, which leads to criticism of the draft law.
So there is no real protection against over-indebtedness. There are, however, helpful tips for avoiding debt from the outset. It can help, for example, to keep a household book that records monthly income and expenses. You should always keep a financial margin. It is also advisable to always talk to creditors as soon as possible in the event of any liabilities.
An extension or similar can often be achieved in this way. Counseling services such as that of the Federal Working Group on Debt Counseling can also provide useful information and help. The Good Finance also offers information on various options for debt avoidance and debt relief.