More and more indebted Swedes apply for debt relief | Debt Consolidation
Since November 1, 2016, the number of debt restructuring applications has doubled. It was then that the new law on debt restructuring was introduced that, among other things, simplified the application process. Instead of receiving about 200 applications a week, the Loanden’s remediation department now receives over 400 pieces!
What really caused this dramatic increase? In this post, we will take a closer look at the details of the statistics and the new legislation, but we will start by quickly finding out what a debt settlement actually is for something.
Short on debt restructuring
You apply for a debt settlement at Loanden. This option allows you to pay off some of your debts for a certain period, usually five years, and then you are completely debt free. This sounds great, but of course there are some “hooks”. During debt settlement, you only have to live on a minimum of living, since your other income is used to pay off your debt.
The new debt restructuring law
In May 2016, the new law on debt restructuring was voted on in Parliament and approximately 5 months thereafter, on 1 November, the law came into force. This was probably a contributing factor to why debt restructuring applications declined during the summer and then skyrocketed at the end of the year.
Many Swedes simply chose to wait to apply until the new law became effective. The new Debt Settlement Act brings with it a lot of benefits that we will look at below.
Benefits of the legislation
- Applying for debt relief is now easier thanks to the law change. In addition, the law also brings about a lot of changes that increase the chance that the decontamination will succeed.
- The number of information to be submitted in connection with the application has decreased.
- You can now apply for debt settlement directly on the web, which was not possible before.
- Anyone who has been granted a debt settlement no longer has to pay the majority of smaller amounts to several debt owners each month, but now the payments are made directly to Loanden. The Crown Magistrate, in turn, makes payments to the involved debt owners once a year.
- In some cases, it is possible to carry out debt restructuring for three years instead of five years.
- Debt settlement also includes two payment-free months (July and December) each year. However, this only applies to those who have an income that exceeds the minimum of living and who regularly pays on their debts.
Swedes’ indebtedness – a big problem
5 tips for a stable economy
Although debt relief is a good solution when you are at the bottom of the debt threshold, we assume that you will never ever have to apply for one. That is why we have collected 5 smart tips on how to maintain a stable economy below.
- Stay away from impulse purchases. This is rule number one if you want control over your finances. A well-thought-out purchase is always a more profitable alternative, as you can both save money while staying far away from the debt burden.
- Save money. Even if you cannot save any large sums each month, a saving is always a saving. You never know when you will need a little extra money and when you are in such a situation you will be glad that you at least save a little money.
- Borrow responsibly. Remember to always think through any loans and make sure you can actually afford to pay it. Even if the loan is small, it can quickly become expensive if you experience payment difficulties.
- Stick to a budget. This is a recurring tip when it comes to maintaining a stable economy and the reason why it is constantly nagging about a budget is because it actually works. Take control of your finances by keeping track of your expenses, your income and your disposable income. Here you can read more about how to create a budget.
- Always pay your bills on time. This is also a classic tip when it comes to a stable economy, but it is also perhaps the very best tip. If you always pay your expenses on time, there is no room for debt to start growing. In addition, you avoid unnecessary money stress while at the same time keeping track of how much money you can spend.