Those who can no longer meet their payment obligations are in a spiral of debt and have to expect the bailiff to stand in the door to collect all the beautiful things that were bought on credit and not paid for.
Anyone who suddenly loses his job or is left by his partner will run out of money and will ultimately no longer be able to service current loans. Experts assume that around three million private households in Germany are over-indebted. One in ten adults is so deep in debt that they can no longer leave the vicious circle without outside help.
What is over-indebtedness?
One speaks of over-indebtedness when a family or a person has no more savings and the monthly income is insufficient to cover all expenses. Many households in Germany already have problems with debts that are less than 10,000 USD and young people who still live in their parents’ homes already have a problem with 1,000 USD in cell phone debt. Young people, in particular, are particularly at risk because if they take on new debts to settle old debts, they can drag themselves deeper and deeper into debt over the years.
Who can be affected?
They are men and women with and without a doctorate, with and without training. Most of the over-indebted are between 30 and 50 years old. At this age, a family is started, loans are taken out, and if something unforeseen happens, such as the loss of a job or pregnancy, in extreme cases this can mean that the loans can no longer be serviced.
The income of the people who ultimately have to file for private bankruptcy is usually very tight. Many of those affected are Social Welfare recipients who have practically no financial scope. Those who have credit obligations from better times can no longer meet them at the latest when they receive Social Welfare.
How does over-indebtedness come about?
For German consumers, separation from the partner and divorce are the most common reasons, but unemployment, a serious accident, or a long illness can ultimately result in obligations no longer being fulfilled. Even a harmless guarantee obligation can lead to ruin.
Those who cannot resist the temptations of consumption, who always respond to advertising in the way that the advertising industry expects, and who regularly lives beyond their means because they want to represent a status that does not correspond to their true income with the possession of material goods more at risk that the debt trap will eventually snap shut.
Because it has become legitimate in today’s society to consume at a pump, the boundaries are almost blurred. True to the motto “buy today, pay later”, many consumers are tempted to buy things that they neither need nor can afford. This opens the door to debt.
Where can you get help
Anyone who realizes that they have financially overstretched should immediately get professional help from a debt counseling service. Private bankruptcy is not always the only way out. In the early stages of debt, there are still opportunities to reach an out-of-court settlement with creditors, thus avoiding the worst.
This help is offered free of charge by debt counseling services.