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In Switzerland, the number of people in debt is increasing. Image: keystone
More and more people are getting into debt: in autumn there is a big wave of debt execution
Loss of wages due to the Crown and increased consumption on credit: The number of people over-indebted has increased significantly.
Many Swiss have been able to save in recent months. Instead of spending their money on vacations and free time, they accumulated it in the account. For many others, however, it was the other way around, with the short-time job or job loss leaving a hole in their wallets. Anyone who hasn’t paid their bills didn’t have to worry about money collectors. Because a temporary debt foreclosure freeze was applied during the closing, the creditors postponed their claims for the time being. According to the Swiss Association of Debt Collection Offices, the number of cases is behind by up to 20 percent compared to previous years.
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The backlog is likely to pick up soon – Debt enforcement offices and collection companies expect a wave of debt foreclosures and creditor claims in the fall, whether from health insurance companies, telecommunications companies, or retailers. “Until now, some creditors may have waited out of solidarity,” says Stephan Boesch, president of the central Swiss debt collection offices. “You should now be able to claim all outstanding amounts at once.” You have three options: try it yourself, hire private debt collection providers, or take legal action (debt compliance).
Debt counseling is “pretty much a pin and needles”
Debt advisers are concerned about this situation. They also believe that there has been a significant increase in over-indebted people. The phone does not ring more often than usual: “We always feel these kinds of events only after a delay and are therefore quite concerned,” says Olivia Nyffeler, a lawyer in the Bern debt counseling department. Before those affected decide to go to a counseling center, they usually have already received several reminders and payment orders by mail. To prevent things from going that far in the first place, Nyffeler recommends acting early and seeking a solution with creditors.
During the shutdown, the alert phone was “practically silent,” Nyffeler continues. People suddenly had other fears, they had to find a way to get around the new situation and organize the care of their children. Money worries may have taken a back seat for a short period of time. But now the phone was ringing again as it always had, worries about money had not disappeared into the air, for some they had even worsened.
But not only Corona is to blame. Often times, people who do not control their consumption are caught in the spiral of debt: they buy clothes, furniture or electronic products on credit without worry and postpone payment until the last day: modern payment methods like PayPal make it possible. Or they have multiple leases and thus relatively high monthly fixed costs that they can no longer afford if they lose their jobs. The crown-related online shopping boom may have exacerbated the debt overhang problem. In addition, people also go into debt for reasons such as divorce, illness, inheritance or starting a family.
Collection cases have been on the rise for years
“A lot of people live beyond their means and just don’t pay the bills. These collection cases have been on the rise for years ”, says Dick Wolff, owner of the Liechtenstein debt collection company IB Score AG, when visiting his company in Liechtenstein. IB Score AG is active in Switzerland, Liechtenstein and abroad. Therefore, we have more than enough work and we do not want to benefit from the crisis of the crown, “he emphasized in an interview, trying to correct the bad reputation of his industry.
The industry is accused, for example, of disturbing debtors with harsh language and threats (see interview below). It is not uncommon for collections to be addressed in shows like “Kassensturz.” Wolff argues that in this area the role of perpetrator and victim is reversed in public perception. “Companies have the right to be paid. Otherwise, they will have financial difficulties. “In the current situation, this could lead to a downward spiral. A wave of company bankruptcies is already expected in the fall.
