What to do in case of over-indebtedness?

Having debt is not uncommon – nor is it a bad thing in itself. It becomes difficult when loans can no longer be repaid and unpaid bills pile up. Then there is an urgent need for action.

Financing your own property, the washing machine on installments – many consumers have debts. The vast majority of such loans are repaid on time. The situation is different in the case of overindebtedness: although there is no clear definition. What is generally meant by this, however, is that a private person is no longer able to make a living for themselves. Once the person is no longer able to pay the rent or the energy, other debts are added quickly.

Being overindebted does not mean being in debt

A widespread view is that over-indebted people are themselves to blame for the misery. Causes of over-indebtedness are often emergencies caused by job loss or a serious illness. Changes in life circumstances, such as a divorce, can also contribute to your inability to meet your payment obligations.

What can you do if you are over-indebted?

If the debts are too much for you, you must take action. In such a situation, dreaming of a big lottery win or an unexpected inheritance only makes things worse. Because in the meantime, further interest claims and perhaps even high reminder fees are added to this. The following steps can help to get out of the vicious circle:

• Seek out contact with a nonprofit debt counseling service. There, all expenses are compared with the income and savings possibilities are discussed with you. It also provides a list of all debts and creditors to give you an overview of your finances. Goals are a strategy to prevent more debt from accumulating and a plan to pay it off.
• Do not get involved in additional schufa-free loans.
• Talk to us. Together we look for a way out of the crisis.
• If all previous steps have failed, insolvency proceedings may be an option. After the expiry of a maximum of six years could then be debt-free.

This is how you prevent over-indebtedness

Do not be tempted to make impulse purchases, certainly not on credit. Always check whether you really need the product or service and whether you are able to pay the installments over the entire term of the loan. Always read the fine print before signing your name to new contracts and loans.

Contrast your monthly income and expenses. At geld und haushalt, the advisory service of the savings banks, you can obtain free planning aids, both in printed form and as an electronic solution for your PC or smartphone. Using them, you can more easily see if and where you should change your consumption behavior.