iff over-indebtedness-report 2013 – key findings

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Key findings 2013 in English (pdf)


Further decline in “over-indebtedness crisis” in 2012

The continuing increase in employment into the final quarter of 2012 appears to be reflected in the statistics relating to new consumer insolvency proceedings. The decline in the number of consumer insolvency proceedings, which had already begun in 2011, fell further in 2012, from 101,075 proceedings begun in 2011 to 95,560 in 2012, a decrease of around 5.5 percent. This suggests that improved levels of employment have led to a decline in the number of people facing an “over-indebtedness crisis” (people facing over-indebtedness as a result of involuntary unemployment).

“Irrational consumer behaviour“ remains the main cause of over-indebtedness in only 9 percent of cases
The significance of irrational consumer behaviour as a primary cause of financial crisis has decreased further. It was cited as the main cause in only a little over 9 percent of cases and as one of several causes in only slightly more than 14 percent. The consequences of ill-health were of greater significance (the main cause of over-indebtedness in 10.2 percent of cases), and more significant than consumer behaviour for the second year in a row. The “Big Five” causes of over-indebtedness (unemployment, divorce, business failure, sickness, consumer behaviour) were the main cause of almost three-quarters (72.1 percent) of personal financial crisis.

Average debts rise to 34,932 euros, median remains low
Average claims of creditors (including default charges and additional costs) climbed from 32,631 euros in 2011 to 34,932 euros in 2012, with an average of 12.9 separate claims per household. This increase of about 7 percent corresponds to the development of the average level of residual consumer debt published by the SCHUFA (2011: 8,627 euros, 2012: 9,190 euros). By contrast, the median level of indebtedness, being the mid-point of indebtedness across the board, remained at 17,338 euros (2011: 17,789 euros).

Indebtedness to banks rises to an average of 16,261 euros
An average of 16,261 euros, almost 47 percent of all indebtedness, was attributable to banks. Their significance has risen again, after a fall in both amount and percentage in 2011to 45 percent (14,601 euros).

Debts to public institutions rise to 6,168 euros
After banks, public institutions are now the largest creditor group. Significant changes are also apparent in this area. Thus claims by governmental institutions reached a peak of 17.7 percent of the total outstanding debt (6,168 euros) last year.

Default charges and costs are an average of 5,278 euros, 18 percent of total indebtedness
An average of 10 percent of the amount claimed by creditors was default charges (3,656 euros), and about 8 percent of the average was legal costs (1,622 euros). There were considerable fluctuations according to creditor group, with an increase of 12 percent in charges claimed by private creditors, rising to 38 percent in charges claimed by debt collection agencies, and 43 percent in charges claimed by telecommunications companies.

Clear rise among people over 50 and people without German citizenship
Over-indebtedness has become older in 2012. The average age of over-indebted individuals was 41, and there was a clear rise in over-indebtedness among people aged 50 or more. In recent years there has also been an increase in the number of people without German citizenship seeking money advice. This group accounted for almost 18 percent of all money advice clients and was thus over-represented by a factor of 2. Single parents at 16.1 percent were not in fact the largest group in terms of household type, but by comparison were – as in previous years – affected the most by over-indebtedness. (incidence ratio: 2.39)

Indebtedness of self-employed rises to 97,505 euros
Despite a decline in start-ups and the standardisation and simplification of insolvency proceedings, a larger percentage of the (formerly) self-employed sought money advice in 2012 (9.9 percent as opposed to 9.4 % in 2011). Existing claims against this group (including enforcement costs and interest on arrears) rose to an average of 97,505 euros. The self-employed were on average 45 years old.

The fall in the number of unbanked households came to a halt in 2012 – 13 percent of the over-indebted had no bank account
The decline in the number of unbanked households receiving money advice in 2011, probably associated with the introduction of the “protected account”, came to a standstill in 2012. About 13% of over-indebted people surveyed did not have their own bank account.