The church helps when the mountains of debt pile up

Sandra R. (Names of those affected changed) works in a public administration with a permanent position of 50 percent. The fact that debts are still weighing her down and she is only slowly finding her way out of over-indebtedness does not show on the divorced woman's face. She also does not want everyone to know, least of all her children between eight and twelve years old.

The debt spiral is starting to spin

"The debt spiral started with the breakup," says Ms. R. "I received alimony from the divorced husband, but limited, as he himself was already living at subsistence level. Worked first one day. Because of 100 francs too much income I didn't get on welfare. Although I was then able to increase to 50 percent at work, but the extra income reduced the alimony. In the end, I didn't have more, and it just wasn't enough."

"The consultation took place at eye level, it was always respectful."

The effects quickly became apparent for the single mother: bills accumulated, she could no longer pay the health insurance premiums in full. Due to a reduction in the income limit for receiving health insurance premium subsidies, she was no longer eligible to receive, she could hardly afford the additional expenses. To be able to pay the bills anyway, Sandra took R. Borrowed from private individuals, and later a bank loan. "But of course that was no solution in the first place," she thinks today. "I tried to pay off the credit and the loans, often went without food, without hygiene items, but I was still just paying off everywhere." Slowly ripening the resolve to get help. "Of course, it took a lot of effort to go to the debt counseling service and disclose everything, but it was worth it, after all, I never wanted to end up in bankruptcy or debt collection."

Do not sink into resignation

Consultation with Barbara Bracher, head of the Lucerne Debt Office, yielded some surprising results. The bank loan that Sandra R. should not have been granted to her to that extent due to her financial situation. Lending should not lead to over-indebtedness, repayments were a problem for Ms. R. not portable. And Sandra R. lived clearly below the minimum subsistence level under debt collection law.

The debt counseling helped Mrs. R. to get out of the loan, so that for the past year she has had to pay off a reasonable contribution of 100 francs per month over the 36-month period. The specialized place gave Tipps, where Mrs. R. could save money through even better planning, and submitted an application to the LZ Christmas campaign for her to have outstanding dentist bills covered. The most important experience for the divorced woman: "The counseling took place at eye level, it was always respectful." And Barbara Bracher has been very helpful to her in not sinking into resignation. A life with debts is very exhausting, it is totally tiring when you see no more land. To be able to make a clear planning together with someone had already been a first support.

Relief sets in

Barbara Bracher confirms: "A first big relief sets in for the clients at the time of planning the repayment, not only at the successful closing. When they see that there is a solution."

Similarly, John P. Experienced. "The debt counseling helped me in everything, starting with getting all the bills in order in the first place and making a clear budget breakdown."For the 34-year-old, the road to the debt crisis began when he was 18. "I had not learned to handle money at all, suddenly had to live independently and was not prepared for it at all. At home there was sometimes a lot of money, then again none at all. I often lived beyond my means. I do not pay bills, nor do some insurance companies. My approach to life didn't fit with society's processes. Overall, I certainly lacked a social, stable network."

No debt owed to others

But looking back, the 34-year-old does not look for the responsibility in others: "The fact that the debt exploded in the end, I am responsible for it myself." Barbara Bracher underlines this statement: "Often our advice seekers take responsibility for the creation of the debt. However, most go into debt during life stage changes such as separation, illness, accident or even because of a job loss.".

Bracher adds: "For a turnaround to succeed, our advice seekers need a high level of motivation."Be necessary, as in the case of Mr. P., a regular income, a stable situation, a lot of discipline. "We only start negotiations with creditors regarding partial debt relief after a four-month to six-month trial period," says the consultant.

John P. is grateful for the framework set. He had never experienced the redevelopment as a lack of freedom, but needed solid ground. And then the creditors would have also participated and waived 40 percent as part of a three-year plan. Barbara Bracher is important: "The creditors have confidence in our debt counseling". Debt relief is usually a prerequisite for allowing over-indebted people to regain a perspective of a debt-free future, he said. Because already with the service of high interest, debt collection and additional costs not few of the advice-looking for would not come at all any longer for the repayment of the actual debt. In addition, when wages are garnished by the debt collection office, those affected can no longer pay current taxes, since this amount is not included in the minimum subsistence level under debt collection law. This leads to a new debt. Debt collection in the canton of Lucerne increased in the recent past, with almost 97,000 payment orders registered in 2017.

Early Warning Signs

What signs have Sandra R. and John P. experienced as early warning signals? Mrs. R. says: "When bills and reminders accumulated, and when at the end of the month I could no longer buy food. I also noticed how thin-skinned I became and that I could no longer sleep. I should have gone to debt counseling much earlier, then I would have seen clearly earlier that I live below the minimum subsistence level under debt collection law, and found a better way to deal with it."

Mr. P. Echoes the same sentiment: "When bills and reminders come in, don't think it's going to take care of itself, but address the issues." The debt counseling both experienced as real support.