People with problematic debts need to be helped more quickly and be assured that they can start again without debts. In doing so, they must receive help from municipalities and be able to count on aftercare, so that they do not run into problems again.
That is the core of the advice From guilt to clean slate, that the Council for Public Health and Society (RVS) presents today to Minister Schouten for Poverty Policy. Municipalities are given a key role in this vision: they must buy off creditors and agree a payment arrangement with residents who have run into serious financial problems. The idea is that they will get rid of all their debts in three years.
In the Netherlands, more than 600,000 households have problematic debts. The social costs of this are estimated at 15 to 17 billion euros per year.
If people are unable to repay the municipality, the government should help by means of a kind of national debt fund, with which it can guarantee the municipalities. What that should look like is not entirely clear, but the council does write explicitly that it is not a general amnesty: the debt is bought up, but not just forgiven. There are already experiments in various municipalities with ways of repayment, there should be more of them, “with financial backing where necessary”.
Muddling too long
Nearly three million households struggle to keep their heads above water. There are fears that high inflation and sharply increased energy prices will also push them into debt.
The RVS also advocates faster identification and prevention, for example by setting up a central debt register. As with their pension, for example, people can gain insight into their own situation, and if they give permission for this, care providers can also take a look. Signs that someone is getting into trouble are, for example, no longer paying the health care premium, the outstanding number of fines or the lack of a permanent home address.
“We are now letting people muddle on for far too long,” says chairman Jet Bussemaker of the council in the NOS Radio 1 News. “Once you have that debt, there must be an arrangement, so that there will be perspective again. If people get perspective again, it is also better for society.”
No trust at all
As far as the council is concerned, the government is taking the initiative with new legislation. “Care for residents in vulnerable circumstances must take precedence over the fear of individual fraud,” according to the RVS, a reference to the childcare allowance affair in which people became deeply in debt because they had wrongly had to repay high amounts to the tax authorities. “The national government, in particular, can really step up its game when it comes to debt control,” says Bussemaker.
Lecturer in debts and collection Nadja Jungmann of the Hogeschool Utrecht thinks the advice does not go far enough. She points out that five out of six households with problematic debts are not visible to the authorities.
They don’t report if they can’t figure it out, because they’re ashamed of their situation or don’t have any confidence in the government. “I would like to invite the council and the minister to consider whether the approach should not be even broader,” Jungmann said in a statement NOS Radio 1 News† “What will make that people who are in a hopeless situation are reached after all?”
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