« The treatment of indebted Swedes is based on a nid image »
Over -indebtedness is a growing societal problem in Sweden. The financial trials in recent years have exacerbated the situation, but the development has been going on for a long time. Between 2010 and 2024, the total debt sum at Kronofogden increased by 112 percent and today amounts to SEK 137 billion, corresponding to 2.2 percent of Sweden’s GDP.
These debts are borne by 437,000 people, which corresponds to as much as 4.1 percent of the population. Median debt amounted to SEK 85,206, one Increase of SEK 6,400 Compared to the year before. There are also 90,000 so -called « eternity debtors » at Kronofogden. 1 percent of Sweden’s population who never become debt-free-some of them have been in the authority’s register since the economic crisis of the 1990s.
Although the debt sum has increased to new record levels and that the credit test has obvious deficiencies, the number of debt restructuring granted is reduced. Only 7 percent of the over -indebted applicants to have the debt written off, and of them it is one of four who are granted it.
Every fifth blank loan goes to people who, after paying their monthly costs, does not have the money left to live for
In a new report from Arena idea Can we show that the difficulties in being granted debt restructuring lead to people being excluded from the labor market and, in the worst case, shortening their lives, without reducing the over -indebtedness for that matter.
Intuitively, it may appear that tough repayment requirements deter from debt. In fact, the effect has to increase high -risk credit, as the credit companies have very weak incentives to credit the individual. The companies can be secure that the state always drives the debt.
This means that even loans to people with very little opportunities to repay them in time, become profitable: every fifth loan goes to people who, after paying their monthly costs, do not have the money left to live for.
In Sweden, indebted individuals have weak driving forces to work because all extra income goes to pay the debt
The most common causes For over -indebtedness, either unemployment, divorce or illness is causing a sudden loss of income. This contrasts to the image of indebtedness as a matter of laziness and over -consumption. An image that in turn contributes to the stigma that means that people do not seek help on time.
In municipalities with a weak labor market, such as Ljusnarsberg and Perstorp, every tenth person is over -indebted, compared to one in a hundred in well -off Danderyd.
In Sweden, indebted individuals have weak driving forces to work because all extra income goes to pay the debt. The period for debt restructuring (if granted) is also long in an international perspective – five years, instead of three as in most other countries. This leads to exclusion from the labor market.
At the same time, the positive effects of debt restructuring are clear: increased employment, better public health and higher incomes. In addition, debt depreciation is an underutilized macroeconomic instrument for stimulating the economy in bad times.
The government has identified Prolonged over -indebtedness as a major societal problem and presented an investigation in the days to reduce the problem of eternity debtors. We would like to urge the government to broaden the review to include the entire debt restructuring system. The report submits the following proposal for a modern debt relief policy:
1 Debt relief should be granted earlier and include more. Debt relief for people of working age would increase the labor supply. Of the few who apply for debt restructuring, it is currently especially the elderly with little opportunities to improve their income that is granted it. Extended opportunities for debt restructuring earlier and for more people would provide socio -economic gains and contribute to a more responsible lending system.
2 Improve information on debt restructuring and extend resources to budget and debt counseling. The resources for debt counseling are at its lowest in municipalities where the needs are greatest. The application process requires a thorough review of the debt situation, which can be difficult for those who are already struggling with financial stress. Here, budget and debt counseling plays a central role as support and guidance throughout the procedure.
3 Shorten the decrease in the decrease. A shorter payment plan, from five to three years, would be in line with developments in other Nordic countries and give people a chance to return to an independent financial life faster.
The most common causes of over -indebtedness are unemployment, divorce or illness that causes a sudden loss of income, not laziness and over -consumption
4 Strengthen incentive for work during the remediation period through a fixed repayment amount. Since the repayment amount is continuously adjusted according to the individual’s income, this means that increased work effort does not lead to an improved financial situation. Instead, the repayment amount should be determined at the beginning of debt restructuring.
5 Improve mapping of high -cost loans and other debts. The market for consumer credits has grown, and credit without security has increased. At present, there is no systematic survey of the types of liabilities individuals have. A national debris would enable a more accurate analysis of how widespread the problem of high -cost loans is, as well as giving a broader overview of the origin and composition of the debt.
These reforms are required to strengthen the individual’s financial security and to promote Sweden’s recovery at a time characterized by recession and economic uncertainty.
