Large part of the Household is is Under Over-indebted.
As can be seen from the Insolvency Report 2014 of the Institute for Financial Services, despite a good overall economic situation in Germany, the number of households considered “over-indebted” is rising. In 2014, around 3.36 million households in the Federal Republic were considered to be over-indebted. Compared to the previous year, this means an increase of around 60,000 households! The average debt burden per household in 2014 was around € 32,500 – a further significant year-on-year increase of around € 31,400. Especially since the average age of debtors now drops to 40.2 years. Here, the number of indebted young people is likely to have a significant impact, because in this target group, the level of debt has increased the most.
Being in debt does not mean being over-indebted
However, one thing should be clear with regard to over-indebtedness, because not every debt is necessarily over-indebted. As a matter of principle, debts are to be understood as pure payment obligations. You do not talk about over-indebtedness until your own financial resources are no longer sufficient to meet the financial demands of loans etc. In this case, banks also speak of a so-called repayment default on loans.
How is over-indebted?
But what are the reasons for over-indebtedness? The iff has also referred to this question in its study. The most commonly identified reasons for over-indebtedness are:
• income poverty
• failed self-employment
• Divorce / separation
There is no question that these reasons can hardly be foreseen, let alone be avoided. However, there are reasons for over-indebtedness that are considered preventable provided you follow a few simple rules. According to the study, more than a sixth of consumers are self-responsible for their own over-indebtedness!
Tips to avoid over-indebtedness
However, with a few simple tips and a changed pattern of behavior, the risk of over-indebtedness can be significantly reduced:
1.) With the keeping of a budget book necessarily keep the monthly costs in the overview, because only those who have their finances in view, can estimate what he can and can not afford. Thus, it can also be ensured that, for example, when taking out an installment loan, not too high repayment installments are agreed.
2.) Create a household bill in which you put all the costs, such as telephone, internet, electricity or gas to the test. If you find too expensive old contracts, then check whether the same services are not available on more favorable terms.
3.) Show no uncontrolled consumer behavior. In 8.6 percent of all cases, over-indebtedness is due to such ill-considered consumer behavior. Thus, in particular, does not allow to be tempted by the various financing offers in the trade to buy.
4.) Equally problematic: a permanent use of the disposition credit. If the account is in negative territory for a long time, one should consider replacing the discretionary credit with a cheaper installment loan.
5.) Before you take a installment loan, you should look at the credit conditions of individual loan offers accurately and perform corresponding detailed comparisons.