Debt: outside help is often the last resort
Anyone who accumulates a mountain of debt can no longer get out of the spiral of debt without help. Some people tend to bury their heads in the sand. However, debt counseling can help and even greatly reduce the debt burden. However, the following must be observed!
More and more debtors
Experts know: “The issue of debt is still a matter of great shame,” explains Jennifer Engelmann from Caritas’ debt counseling service. Tears often flow during the first consultation. According to Caritas, more and more people turn to professional debt counselors because fewer and fewer people can cover their needs with their own income. More and more women are turning to debt counseling. Single mothers in particular often don’t know how to get through the next month.
This is also due to the current range of products. Often large markets attract with zero percent installment payments in order to increase sales. At some point it pops because the number of loans piles up. Some then make the mistake and take a so-called “credit without Schufa”. These loans come with extremely high interest rates. These dubious offers are not a way out.
Not just debts – also Hartz IV
Anyone who goes to debt counseling usually has other problems. Hartz IV, separation or an imminent divorce, a serious illness or one parent must take care of the children completely alone. It was the same with Jochen G. After his separation, unemployment came suddenly and then the slide in Hartz IV. In the meantime, a mountain of debt has accumulated that he could no longer cope with on his own.
What can debt counseling actually do?
Often, debtors have had financial problems for years. By the time they find their way to advice, more and more debts pile up. For the debt counselor, this means first of all to work through the last few years and to get an overview. The experts go through all the bills and credits and collect information. “How much money does the person concerned owe whom?” Is the main question. Some come to the consultation with a well-structured folder, others with lots of unopened letters in their pockets.
Secure the absolute subsistence level
In the counseling, the first attempt is made to secure the absolute subsistence level: food, rent, electricity and gas costs have to be paid so that the slide does not become deeper and homelessness threatens. But the advisors emphasize: “We are educators, not bankers. It is not our job to collect the creditors’ money, but to reintegrate people into life, ”says Engelmann from Caritas. First of all, those affected need solid ground under their feet.
Also read:
– Hartz IV: Borrowed money for debt repayment is not a creditable income
– Bafög: More money and better prospects for debt relief
First defeat the trigger
Anyone who suffers from a serious illness must first recover. If someone suffers from an addiction, it must first be addressed. Gaming and alcohol addiction are often debt triggers. The people no longer have a hold.
Out of court settlement
The debtor is supported in reaching an out-of-court settlement with the creditors. A debt settlement plan should help to present the debt structurally. Some creditors are willing to forego part of the debt if they are offered at least some debt relief. If that is not enough or if creditors refuse a reduced deduction, insolvency proceedings can be applied for in the next step. In addition, an appointed insolvency administrator checks the attachable assets and income of the debtor. If available, this will be distributed to the creditors.
A debtor is entitled to this exemption
There are allowances to preserve the debtor’s existence. If you have less than 1,140 euros net to live on, you don’t have to give anything. In the case of maintenance claims from spouses or children, the value increases. As a rule, the process takes six years. During this time, the debtor is encouraged to look for a job or to keep the existing job. The dry spell has to be overcome. After that, the person concerned is debt-free and can start over.
Draw up a budget
So that one does not end up in such a serious situation again, debt counselors offer a budget that is drawn up jointly. In doing so, it is visualized which income opposes the expenditure. Because many people are not aware of what they are spending how much money on.
The experts advise you to set a fixed limit that shows exactly how much money can be spent per week. This must then not be exceeded. In addition, one should build up reserves in order to be able to react to situations that cannot be covered by the monthly budget. In addition, the debt counselors look for ways to save together with the person concerned. “Does the car really have to be? Is the rent too high? Can additional monthly expenses be saved that are not absolutely necessary? “
No debt during personal bankruptcy
A personal bankruptcy can be a unique opportunity to start over again. The advisor emphasizes that it is important that no new debts arise in the course of the bankruptcy proceedings. Because these are no longer covered. That could jeopardize the ongoing debt relief process.
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