What is non deferrable debt
Debt and Indebtedness: Definition, Reasons, and Ways Out
Money and debts are one in Germany omnipresent subject. Not only the state has debts, but also many private individuals.
The meaning of debts becomes clear when you look at the numbers: According to the 2017 debt atlas by the credit agency Creditreform, this is Number of overindebted people rose to 6.91 million. This means that around 10 percent of the adult population is over-indebted.
The total debt volume was 209 billion euros, which is the equivalent of one average debt burden of around 30,200 euros per person makes. Debts are therefore an important and always topical issue. Therefore it is also necessary to be well informed about it, especially if such a situation arises for you.
Some basic questions need to be answered: What is debt actually exactly? What types of debt are there? When is over-indebtedness? in front? And last but not least, high debts lead to the following questions: What can I do? Where can I get help?
Debt in a nutshell
Debts are payment obligations towards third parties. You can e.g. B. derive from a loan or purchase agreement.
Debt is usually not a problem, provided it does not lead to over-indebtedness. In this case, the debtor's income and assets are no longer sufficient to pay off the debt.
If there is too much debt and insolvency, a debt settlement must be agreed with the creditors. As a last resort, there is personal bankruptcy, at the end of which there may be a discharge of residual debt.
Debt threatening existence - primary debt
Primary debt, rental debt, energy debt
What are debts? A definition
A general definition of debt can be as follows: Debts are liabilities to a third party, or in other words: as soon as someone has the Obligation to repay owed to a creditor, he owed it.
Many do not realize how quickly such a situation can arise. As soon as you feel for example a little Borrow money from a friend or one Purchase in installments close, there is basically a debt by definition. So debt is initially somewhat relative Everyday.
That too Installment payments and overdrafts Debt should be clear to anyone who, for example, has to submit a debt declaration to authorities.
In many cases it is necessary first debt to make to to be better off afterwards. Because most people, for example, can't just feel like that Buy your own home - They take out a loan, that is, they go into debt, and they pay off the house over a longer period of time. If all goes well, in the end it belongs entirely to them - which would not have been possible without the debt (credit).
Businesspeople also often have to take out loans in order to do so invest in their operations. If these investments bear fruit, it means one Growth for business - triggered by an initial debt.
When the debt gets out of hand: Over-indebtedness
So take debts diverse forms on and can a priori not rated as good or bad. Temporary debt are standard and in many areas of life and business can have positive consequences to have.
Problematic become debts when they get out of hand. Then from Over-indebtedness spoken. Such a specific case occurs when the existing Long-term liabilities no longer serviced because your own income or assets are no longer sufficient for this. This can also affect others, for example because maintenance can no longer be paid because of debts.
Reasons for over-indebtedness
Why someone gets into over-indebtedness, it can do for that different reason give. Often is a severe turning point in life the trigger for a debt spiral, but sometimes there is also one creeping process in front. A divorce can trigger debts, for example, because a separate apartment has to be financed alone.
The most common Reasons for over-indebtedness are in Germany according to the Federal Statistical Office:
- Illness, addiction, accident
- Separation, divorce, death
- Inefficient housekeeping
- Failed self-employment
Other reasons can include, for example long-term low income or a failed real estate financing. So it becomes clear that it is no general pattern shows how someone gets into over-indebtedness: the causes are wide-ranging, and there is no simple explanation for debt.
Cell phone debtsGambling debtsYoung people with debt disposition debts inheritance debtsLoan debtsBank debtsCredit debts
There are some payment obligations where there is a higher risk of accumulating debt. Such are often called "Debt trap" designated. By definition, for example, obligations are included very long running time including, because in the meantime the economic situation of the debtor can change and payment is no longer possible in this way.
Debts that young people get into very often, for example, are often associated with expensive ones Cell phone contracts. As a rule, the problem here is not the mobile phone tariffs, but expensive additional options and the financing of expensive smartphones. Others too expensive consumer goods often lead to youth debt.
Another typical debt trap is that Overdraft. While an overdraft of the account is practical and often easily possible, this form of financing is extremely expensive in proportion. Should become a habit lots of interest due and it can be difficult to get out of the red at all.
As a rule, it is also not recommended to use a Credit for debt to record. Apart from the fact that the Schufa makes it difficult to get a new loan with high debts, you only postpone and worsen the problem by being you Pay off debts with debts.
A sustainable solution looks different, as will be discussed below in the text.
Only in a few cases can it be useful Loans with very high interest rates to repay faster if cheaper loans can be found. Otherwise, one should rather avoid shifting debt.
Types of Debt
Debts can be categorized and classified in various ways. One way of differentiating is after Urgency of liabilities. In this way, the debt can initially be settled in two types organize:
The Primary debt have a special urgency because they existentially important areas affect. These debts can endanger the debtor physically and psychologically. Examples of such liability are for example Rental debts. If a rent arrears can no longer be serviced, this may lead to homelessness.
Debts with, for example, are also urgent Energy bills and health insurance contributions. Tax debts should also be avoided.
Secondary debt on the other hand no immediate threat to existence because they do not relate to vital areas. So all other debts fall into this category. Examples for this are:
These, so to speak, less important debts should still be taken very seriously. Even if they are not directly threatening the existence, it can Accumulating such debts has dire consequences to have. The lower urgency exists only from the debtor's perspective and with regard to its existence - the creditors still insist on repayment, regardless of such classifications.
More types of debt
Debt to the tax office, tax debts, maintenance debts
National DebtGEZ Debt Debt with the Health Insurance FundStudy DebtConsumer DebtBAföG DebtPrivate Debt
What to do in case of debt
Those who can no longer pay their bills are wondering with ever increasing bills Debt: What Now? Often a financial help wanted at debt.
If over-indebtedness occurs, it must first be clarified what debts at all: everything has to be on the table. Then you should do the following:
- Arrange your debts according to urgency.
- Contact the creditors and try to arrange payment in installments or waiver (possibly in part).
- If you have any problems or questions, find a Debt counselingon.
Basically, it is even better to be yourself already to a professional debt counseling service as early as possible to turn. This can be obtained from the Debt settlement Stand by your side until you are hopefully solvent again and have no more debts.
Statute of limitations on debts
According to Section 195 of the German Civil Code (BGB), the regular limitation period three years. The limitation period begins at the end of the year in which the claim arose. In the case of debts, the statute of limitations usually applies on December 31 of the third year after creation of the claim.
Household debt, supplier debt, Schufa debt, debt at Hartz 4, debt in divorce
Personal bankruptcy with high debts
In those cases where the debt settlement is by way of a amicable agreement with the creditors is not possible is and the debt counseling center could not do anything here, can the last resort out of debt is personal bankruptcy be.
When there is bankruptcy, debts cannot be repaid: Bankruptcy means inability to pay. An application for insolvency must then be filed with the competent local court, so that a Bankruptcy proceedingscan be opened.
A bankruptcy administrator appointed by the court needs all information concerning the debtor and his financial situation in order to negotiate with the creditors.
In return, the debtor must provide everything that can be seized, i.e. that exceeds the tax exemption, for example the attachable part of his income.
For six years the debtor must do so and contact the Code of Conduct hold. This includes, among other things, doing every reasonable job, not giving false information and reporting about a change of job or address.
If the debtor adheres to these obligations for the entire period, this will usually be after six years forgive the remaining debts. This is the so-called Debt discharge.
- fotolia.com/Andrey Popov
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