The number of applications for debt restructuring during the first half of 2018 was twice as many as in the corresponding period 2016. At the same time, the number of applications in the first half of 2018 was slightly fewer than in the first half of 2017. According to Crogden Credit, this reduction is due to the fact that more successively the better in recent years. . The strengthened economy can also be discerned in terms of the number of payment remarks. The number decreases.
Much has been done about the Crown Magistrate and the authority’s responsibility for debt restructuring in recent years. It all started in November 2016 with the introduction of a whole new regulatory framework. Here we tell a little about the latest Crogden Credit has to report on debt restructuring.
Dramatic increase with the new rules
Making it easier for the heavily indebted to both submit an application for debt restructuring and get it granted was one of the main ideas behind the new regulations that came into force in November 2016. The effect of the news can be said to have had an immediate impact and a kind of summit was achieved first half-year 2017. The table below shows statistics from 2015 onwards.
Here’s how the new rules work
Those who are heavily indebted today have the opportunity to turn to the Crogden Credit and apply for debt restructuring. This can now be done directly online on the authority’s website, which means a significant simplification. In addition, fewer tasks are required, which in itself facilitates the process itself.
If the Crown Magistrate decides to initiate debt restructuring, the applicant may live on a kind of subsistence minimum for five years. The idea is that all surplus should be used to pay off debt. It is Crogden Credit who handles all the practicalities regarding repayment. When the debt restructuring is over, the applicant is completely free from his previous debts.
Living on a minimum of living is cumbersome and provides non-existent space to pay other than what is absolutely necessary. For the sake of ease of debt relief, a rule of two payment-free months has been applied for two years. It’s about December and July.
New statistics show interesting facts
The Crown Magistrate has analyzed the effects of the new rules. One can draw some clearly interesting conclusions from this analysis. For example, there is actually a very big difference between younger and older when it comes to the possibility of having an application approved. The information below applies to data from 2015 up to the first half of 2018.
It is important to seek help from the municipal debt advisors
Each municipality is required to have a function for budget and debt counseling. One of the tasks of the person or group of people working on this is to help the over-indebted in submitting an application for debt restructuring. According to Crogden Credit’s information, it is clear that it is good to take help from the municipalities’ support. 72% of those who contacted the municipality for support received their application. For other applicants, the grant rate was 48%.
The age has clear relevance
It is mainly young people who end up in financial hardship due to large debts. At the same time, the elderly have much greater opportunities to obtain debt relief. In the 65+ group, 83% of applications were approved while only 21% of applications from the youngest age group (18-25 years) were approved. It is somewhat unclear why the difference is so great. One guess from our side is that the principle that the indebted person must have done everything he / she could to avoid the situation can come into play.
Cause of indebtedness
According to Crogden Credit’s analysis, there is a difference between different types of debt with regard to the possibility of being granted debt restructuring. If you want to sharpen the question something can be said that there is a kind of moral aspect in the context. An applicant with debts due to gambling abuse or overconsumption has less chance of getting debt relief compared to someone who has been indebted due to divorce or illness.
There are three factors above that can be highlighted in particular. In principle, all other factors are clearly subordinate. For example, the actual size of the debt is not directly central. Also, where you live has no decisive impact on the possibility of getting debt relief, nor what income you have.
Fewer payment notes
In this context, it should be mentioned that the number of payment reminders actually decreases slowly but surely. The Crown Magistrate believes that this is due to the generally positive economic development in Sweden. However, a type of payment note is increasing, and there are notes due to debt restructuring. Namely, the person who is granted debt restructuring automatically receives a payment note.
Of course, the number of payment reminders is positive, but Crogden Credit raises a warning. They point to the fact that credit behavior continues to change in the negative direction. In short, more people are attracting more types of riskier loans and credits. A deterioration of the economic situation can quickly reverse the positive development.