And the state has to pay: Switzerland owes too much

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If you are unable to pay off your debt in the foreseeable future, you are considered excessively indebted. A total of 5,216 over-indebted people in Switzerland sought advice from the umbrella organization for debt advice in Switzerland last year. They released their 2022 report on Thursday.

In debt statistics, the umbrella organization only deals with over-indebted individuals who report to one of the various specialized agencies. In fact, many more Swiss have debt: anyone with an open mortgage, for example. According to the Federal Statistical Office, in 2021 11.5 percent of all Swiss households did not pay their debt due to at least one payment type. The difference is that over-indebted people can no longer afford a mountain of debt. Blick answers the most important questions.

A critical life event, such as health problems, an accident, job loss or separation, is often at the center of the debt. Another problem: 17 percent of those seeking advice work poorly. Despite their work, they have little money to make a living. Three out of ten people are in debt because of audacious money planning.

However, those who leave the self-employment have the highest debt. In second place are gambling addicts. In general, an addiction – such as a shopping addiction – can lead to high debt.

The average debt is CHF 67,138. Half of those seeking advice from debt counseling have debt between CHF 14,930 and CHF 78,222. Income is very important here. The debts of the 3,274 affected people are less than one year’s income. The debts of 377 people are even more than their three-year income.

Switzerland has the most tax debt: 76 percent of it. 59 percent owe health insurance. At four percent, surprisingly few people have debt due to a lease.

Especially long-term debts ultimately remain in the hands of the state. Because in case of foreclosure, they cannot pay taxes and the bill remains with them. In addition, the cantons take on health insurance premiums and maintenance payments.

For debts from six to ten years, cantons assume 57 percent of the debt. With debts longer than ten years, it’s more than two-thirds of all debt.

Once you borrow money in Switzerland, you carry it with you until you pay it off. In the worst case, a lifetime. Debt advice Switzerland therefore calls for haircuts. This should enable those affected and their families to restart. In particular, the umbrella organization is calling for a new restructuring process with the remaining debt relief.

Meaning: After a certain amount is paid, the remaining debts are written off. This puts the cantons at ease. Because they take on a large part of the debt and ultimately stay with them.

Source :Blick