Debtors falling deeper into debt

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The number of people who need professional debt counselling increased in 2014. The average debt also increased. 

This is according to the annual report of the Association for professional debt counselling NVVK. Last year 92 thousand people reported to a NVVK member for professional help with their debt problems, compared to 89 thousand in 2013. While the number of people who needed help increased, the increase of 3 thousand was lower compared to previous years. Between 2011 and 2012 there was an increase of 12 thousand people and 5 thousand between 2012 and 2013.

The average debt of people who need debt counselling is also increasing. In 2014 the average debt was 38,500 euros, compared to 37,700 in 2013. The 800 euros increase in the average debt is also lower than previous years. Between 2012 and 2013 the average debt increased by 4,200 euros.

According to the NVVK, a growing group of people are trying to get by with a minimum income, because income support measures are being phased out, while expenditure increased.  "After the payment of energy, insurance and healthcare costs, often very little or nothing is left for groceries for this group", Joke de Kock, president of NVVK, said to NOS. "Especially the increased rent and the reduction of housing benefit have beaten a big hole in the budget of this group. Many people find it very difficult to make no debt." A total of 87 percent of the people in debt counselling have an income around the minimum wage or up to average, compared to 74 percent in 2011.

The NVVK figures show that the number of people with insoluble debt, debt for which no debt restructuring or payment scheme can be arranged,  has doubled in the pas three years. According to De Kock, this often involves collections by the government. "It is primarily the legal obstacles that make arranging debt a laborious process. Too fast and too often it is wrongly assumed that there is fraud involved when people make a mistake, for example when applying for benefits and allowances. Then you have a debt that the government very actively collects." The government also often has a status of "preferred creditor", which means that the Central Judicial Collection Agency and the Tax Administration's claims get priority over other creditors. According to De Kock, the governments extensive use of this particular legal status hinders the finding of a solution for people with debt problems.