In Belgium as elsewhere, crisis requires, many are households in a situation of overindebtedness. Over-indebtedness: what consequences? What differentiates indebtedness and over-indebtedness? From when should we / can we consider ourselves “over-indebted”?

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Over-indebtedness has a series of negative consequences. These can be as much material as psychological or physical.

To overcome over-indebtedness, however, it is possible to opt for collective debt settlement. The aim of the latter is, as the FPS Economy explains, to “restore the financial position of the debtor, in particular by enabling him, as far as possible, to pay his debts while guaranteeing him and his family to be able to lead a life in keeping with human dignity “.

Debt consolidation also attempts to regulate overindebtedness in its own way. The grouping of credits aims to consolidate all the credits subscribed (or only part of them), in order to extend the repayment period, and thus reduce the monthly payments due.

Whatever the case may be, overindebtedness is never to be taken lightly. To leave the situation as it is, at the risk of seeing it worse, is never a solution. So take the lead!

Debt and over-indebtedness: what difference?

Indebtedness: definition

A household is considered “indebted” from the moment it is occupied with repaying at least one loan (loan, loan or leasing). Namely that this credit may have been subscribed in the private or professional setting. Almost all households can therefore be described as “indebted” (mortgage loan, personal loan, work loan, car loan, etc.).

Over-indebtedness: definition

However, it is important to distinguish between indebtedness and over- indebtedness… While debt is a relatively common and traditional practice, over-indebtedness proves to be potentially dangerous…

The Belgian House of Representatives defines over-indebtedness as “a long-term or structural failure to meet its financial obligations or repayment deadlines that have fallen due or are due. ”

Over-indebtedness in practice

In Belgium, more than 370,000 people (3.8% of the adult population) were registered as “over-indebted” in 2016. These were therefore filed with the National Bank of Belgium (NBB) due to non-payment. This non-payment concerned one or more consumer credit (s) and / or mortgage loan (s).

555,936 contracts were then considered to be in default for a total amount of 3.1 billion euros.

The number of people affected by over-indebtedness is constantly increasing. In comparison, it was “only” 308,803 (+ 20%) in 2010 against 364,385 (+ 1.5%) in 2015.