New Research Uncovers Illness and Addiction as Primary Drivers of Over-Indebtedness

BERLIN (dpa-AFX) – Illness and addiction have replaced unemployment as the most common cause of over-indebtedness in Germany. This is the result of the “Over-indebtedness Report 2024” of the Institute for Financial Services (IFF), which the “Welt am Sonntag” newspaper reports on.

At 18.4 percent, almost one in five cases in 2023 will be due to health problems. Job loss, in turn, was the trigger in 17.5 percent of cases, according to the study, which is based on data from 114 debt counseling centers. This is followed by divorce/separation, income poverty and consumer behavior as reasons.

Expert speaks of stable employment situation

Experts say that unemployment is no longer the main cause for the first time in years because of the stable employment situation and demographic developments in Germany. “We have an employee market, and there is also a shortage of workers and skilled workers in many places. The issue of job losses has therefore steadily lost importance,” said Patrik-Ludwig Hantzsch, head of economic research at the credit agency Creditreform, which itself publishes the so-called Debtor Atlas every year.

In terms of types of claims, installment loans are at the top, followed by outstanding debts from the public sector, for example in the form of outstanding taxes or demands for repayment of social benefits. “Installment loans in particular play a major role in over-indebtedness in Germany,” said one of the authors of the IFF report, Hanne Roggemann.

Warning about “Buy now, pay later” offers

Almost one in five people seeking advice have at least one claim that results from such installment loans. This includes, for example, “buy now, pay later” offers where the bill does not have to be paid until later.

The Federal Association of Consumer Organizations and the IFF warn against such offers due to high late payment interest and reminder fees. They also make it difficult to keep track of things. In total, almost 200,000 consultation cases from the period 2008 to 2023 were evaluated for the non-representative over-indebtedness report, of which almost 24,000 were from last year./sl/DP/he

– What are the primary causes of over-indebtedness⁤ in Germany according to the ​”Over-indebtedness Report 2024″?

Over-indebtedness in Germany: Illness and ⁣Addiction Replace ⁣Unemployment as Leading Causes

Recent figures from the “Over-indebtedness Report 2024” by the Institute for Financial Services (IFF) have revealed a ⁤significant shift in the primary causes of over-indebtedness in Germany. ‌According to the report, ⁢illness‌ and addiction have supplanted unemployment as the most ⁢common​ reasons for financial distress, marking a‍ dramatic change in the country’s economic landscape.

Health Problems Overtake ⁢Job Losses as ​Leading Cause of ⁢Over-indebtedness

The IFF report, based on data from 114 debt counseling⁣ centers, indicates ​that health ‍problems accounted for 18.4% of cases of over-indebtedness in 2023, while job losses trailed behind at 17.5%. This⁣ shift is attributed to Germany’s stable employment situation and demographic developments, which have led to a decrease​ in job losses as a primary cause of⁤ financial hardship.

Expert Insights: Stable Employment Situation and Demographic Changes

According to Patrik-Ludwig Hantzsch, head of economic​ research at Creditreform,‍ “We ⁢have an‍ employee market,​ and there is ​also a⁢ shortage of‌ workers and‍ skilled workers in many places. The issue of job losses has therefore steadily lost importance.” This sentiment is ​echoed by‌ the ⁤report’s findings, which highlight the changing nature of Germany’s economy ‍and its impact⁤ on over-indebtedness.

Types of Claims: Installment Loans ⁢and Public Sector Debts Top the List

The report reveals that installment loans are the leading type of claim, followed closely⁣ by outstanding debts ⁢to the public sector, such ⁢as unpaid taxes or social benefits. Hanne Roggemann, co-author of the IFF report, notes that “Installment loans in particular play a major role in ⁢over-indebtedness in⁢ Germany.” This highlights the need for ‌consumers to exercise ‍caution when taking on‍ installment loans‍ and to carefully manage their debt.

Warning about “Buy ‌Now, Pay Later” Culture

The⁢ rise of​ installment loans ​as a leading cause of over-indebtedness is a cause for concern, as it reflects a ​”buy⁣ now, pay later” culture that can lead to financial difficulties. Experts ⁣warn that easy credit and consumerism can lull ‍individuals into a false sense ​of security, ultimately leading to financial hardship.

Demographic ‌Factors Contributing to Over-indebtedness

In addition ‍to health problems‍ and job losses, the⁤ report identifies divorce/separation, income poverty, and consumer​ behavior as other significant factors contributing to over-indebtedness. ⁤These demographic factors are intertwined with​ the economic⁣ landscape, and their impact is likely to continue shaping the country’s over-indebtedness profile in the coming years.

Conclusion: Addressing⁣ Over-indebtedness in Germany

The shift ⁢in the primary causes of over-indebtedness in Germany serves as a warning to policymakers, financial institutions, and ⁢individuals to take proactive​ steps in addressing financial distress. By promoting financial literacy,⁤ responsible lending practices, and support for those struggling with debt, Germany ​can‌ work towards reducing over-indebtedness⁢ and promoting a ‌more stable⁢ economic future.

Keywords: Over-indebtedness, Germany,⁢ Illness, Addiction, ‍Unemployment, Installment​ Loans, Public⁤ Sector Debts, ⁣Demographic ‌Factors, Financial Literacy, Responsible Lending, Debt ⁢Counseling.

Meta Description: Illness and addiction have replaced unemployment‌ as the leading causes of over-indebtedness in Germany, according to the “Over-indebtedness Report 2024”. Read more about the shift ‍in Germany’s economic landscape and the implications for ⁤financial stability.

Header ⁣Tags:

H1: Over-indebtedness ⁤in Germany: Illness and⁤ Addiction Replace Unemployment as Leading Causes

H2: Health⁢ Problems Overtake Job Losses ‍as Leading Cause of Over-indebtedness

H2: Expert Insights: Stable Employment Situation and Demographic Changes

H2: Types ​of Claims: Installment​ Loans and ‍Public Sector ​Debts Top the List

H2: Warning⁤ about “Buy‍ Now, Pay Later” Culture

H2: Demographic Factors Contributing to Over-indebtedness

* H2: Conclusion: ⁣Addressing ⁢Over-indebtedness in Germany

What are the main causes of over-indebtedness in Germany according to the 2024 report?

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Over-indebtedness in Germany: Illness and Addiction Replace Unemployment as Leading Causes

Recent figures from the “Over-indebtedness Report 2024” by