The municipality will introduce a pause button to prevent Amsterdammers’ debts from running too high. If the button is used, there will be no more direct debits or reminders until a solution has been found.
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Many Amsterdammers are without a job due to the corona crisis, which means that more and more people will get into financial problems. Alderman Moorman (Poverty) says that about a quarter of Amsterdammers are struggling with debts in one way or another. In addition, about 25,000 people also have payment arrears.
After the credit crisis, it took an average of five years for people with debts to turn to for help. In the meantime, debts have often accumulated enormously and other personal problems have often also arisen.
Pause button
To prevent debts from running too high, the municipality is therefore implementing the pause button in. Then the debts are frozen. Moorman has reached agreement on a collective settlement with the most important creditors such as housing corporations, energy companies and telecom companies. Some of those companies are willing to freeze the debt immediately if they turn up for help.
Kredietbank
The municipal credit bank, which provides loans to Amsterdammers who cannot turn to commercial banks due to a low income, concludes an agreement with the creditors. The Kredietbank then takes over the remainder of the debts. The Amsterdammer has to pay off at the Credit Bank.
‘Smaller’ debt
People with debts of up to five thousand euros can borrow this amount directly from the Kredietbank. Then they can pay off their debt in one go. They then have to pay off the loan from the Kredietbank in installments and at an interest rate of 3 percent.
If the trial is successful, the pause button will also be introduced nationally.
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