Debt advice has undergone a real boom in the past year. Due to the increased costs of living and housing and unemployment, almost 22,000 people will have contacted debt advice for the first time in 2023. Compared to the previous year, this is an increase of almost 17 percent.
The last time there were similarly high numbers was twelve years ago. The number of private bankruptcies opened has also risen sharply in the past year.
About twelve percent of clients cited higher costs, over which they have no influence, as the reason that led them to excessive debt, according to a press release on Wednesday. In the past, this hardly played a role as a cause of excessive debt.
Unemployment is the cause of poverty
The most common reason for over-indebtedness is unemployment and the associated loss of income. “If you become unemployed, you only have 55 percent of your previous income available. This is a problem for the vast majority of people,” says Clemens Mitterlehner, director of ASB Schuldnerberatungen GmbH, the umbrella organization for state-recognized debt advice in Austria.
Wanting to reduce unemployment benefits even further, as ÖVP boss and Chancellor Karl Nehammer (ÖVP) demands, is a slap in the face for the people affected, Mitterlehner said. The debt advisors are calling for unemployment benefits to be increased to 70 percent.
You must be able to afford personal bankruptcy
There was an eight percent increase in the number of private bankruptcies opened last year, to almost 9,000. “We know that many more people need private bankruptcies,” Mitterlehner said. However, you must be able to afford personal bankruptcy. The basic condition for this is that you can make ends meet with your income and do not have to incur further debts.
From the point of view of debt advice, it is urgent to increase the subsistence minimum, i.e. the amount that people have to live on in the event of a seizure.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
