Over-indebtedness is increasing: tips from financial experts to combat financial difficulties

Over-indebtedness is increasing: tips from financial experts to combat financial difficulties

According to a report by www.merkur.de, the problem of over-indebtedness in Germany has worsened again after years of decline. According to credit agency Creditreform, 5.65 million people were over-indebted this year, which means an increase of 17,000 compared to the previous year if statistical effects are excluded.

The reasons for this development are higher living costs, increased interest rates and the weak economy with increased unemployment. What is particularly worrying is that the problem of over-indebtedness has increased among those under 30. This development can have various effects on the financial market and the financial industry.

The increased over-indebtedness could, for example, lead to increased demand for installment loans, which, in connection with high inflation, leads to additional financial burdens for people. This could also lead to an increase in “soft over-indebtedness”, where those affected are not yet officially over-indebted, but reminders and debt collection procedures are already underway.

In the area of ​​financial advice and debt advice, increasing over-indebtedness could lead to increased demand for advisory services. There could also be an increased risk for lenders, which could lead to more restrictive lending.

It is therefore important that consumers, especially young adults, carefully monitor their financial situation and take steps to manage their finances and reduce debt. Sound budget management, checking income and expenses, and taking advantage of advisory services in a timely manner can help avoid financial difficulties.