Over-indebted Families in 2016: Something has changed!


MEMBERS NEWS - 13.05.2016

Nowadays, to be in a situation of over-indebtedness is not automatically a result of unemployment, illness or divorce. In fact, these situations do not show for themselves our social and economic reality. Mortgage credit defaults are emerging as the consumers’ new main problem.


DECO’s Over-indebtedness Office has recently published its first quarterly report on over-indebted families and has revealed a new reality:

Difficulties related to the payment of mortgage credits are now one of the main causes of over-indebtedness. 7,434 consumers have asked DECO’s support during the first trimester of 2016 and 14% of these consumers are facing situations of foreclosure of their house. 4% of these foreclosure situations are related to tax claims. The situation is worse given that a telecommunications company can evict people from their homes for the lack of payment of a minimum contractual period penalty. 

According to the Over-indebtedness Office, the average of the families who seek our help have a monthly income of €1,000 and 3 household members. The decrease of the consumers’ labor conditions (lower salaries) and the high rate of unemployment continue to be two of the main reasons for the maintenance of over-indebted families. Most of these families have an average of one mortgage credit, two consumer credits and two credit cards.

Most of these credits are in a situation of default, even if consumers try to maintain their mortgage credits untouched. This scenario portrays the financial instability of consumers and their excessive rate effort.

DECO will continue to support these families but we need concrete solutions for these problems at a European level, namely, a real protection system of vulnerable consumers and their households and a new individual insolvency system.