National Over-indebtedness Prevention Week: raising awareness, preventing over-indebtedness and providing support

A reality that can hit anyone

Far from being a cliché, over-indebtedness affects all age groups, all professional statuses and all family situations. It is defined as the inability of an individual to settle their debts and pay their bills. There are many causes of over-indebtedness: in many cases, an accident in life – job loss, divorce, illness – destabilises a financial situation. At other times, a combination of loans or unbalanced budget management can also lead to over-indebtedness.

Max Hahn, Minister for Family Affairs, Solidarity, Living Together and Reception of Refugees, stresses: 'Debt can affect anyone. There is no shame in it. And the sooner you act, the greater your chances of getting out of it. That said, it's never too late to seek help.'

To prevent those affected from falling into a downward spiral – often involving loans on unfavourable terms – it is vital to seek help at the earliest sign of difficulty.

A structured support system

Luxembourg provides a specific mechanism, the over-indebtedness procedure, to help the people concerned regain financial stability. The process is divided into three subsidiary phases, with the aim of getting out of debt within a maximum of seven years:

1. The conventional settlement phase, the proceedings of which are held before the Mediation Committee for Over-indebtedness.
2. The legal redress phase before the Magistrate's Court.
3. The personal recovery phase, also known as personal bankruptcy or private bankruptcy, also before the Magistrate's Court.

Throughout the procedure, the people concerned are supported by partners under agreement with the Ministry of Family Affairs, Solidarity, Living Together and Reception of Refugees: the Ligue Médico-Sociale and Inter-Actions ASBL. These partners provide both personalised support via their over-indebtedness information and advice services (SICS), and specialised social monitoring to help beneficiaries regain their financial independence.

Key figures

Over the last few years, the number of new applications to enter the over-indebtedness procedure has remained relatively stable, despite various crises, such as the pandemic, the energy crisis, or an increase in inflationary pressure.

New applications:

• 2024: 51
• 2023: 52
• 2022: 60

Age distribution (2024):

• Under 30 years: 6%
• Aged 31–50: 49%
• Over 50 years: 45%

Professional Status:

• Employed: 42
• Retired or receiving a disability pension: 20%
• Unemployed: 11%
• REVIS beneficiaries: 9%
• Self-employed: 3%
• Participants in an employment measure: 2%
• No professional status: 13%

Family situation:

• Single individuals: 64
• Couples without children: 15
• Single-parent families: 18
• Couples with children: 3%

Number of applications processed per phase since 2014:

• Phase 1: 643 cases (82%)
• Phase 2: 90 cases (11%)
• Phase 3: 51 cases (7%)

Prevention and financial education at the heart of the campaign

During the awareness week, information stands will be set up at various stations and public locations, and educational materials will be distributed. All practical details are available on the dedicated website: https://www.endettement.lu.

Press release by the Ministry of Family Affairs, Solidarity, Living Together and Reception of Refugees