A house or a new car – if you can not pay this yourself, you can finance it with a loan. But life can thwart the bill: If a long-term insolvency occurs, the danger of landing in the debt trap increases. In the article you will learn how you can protect yourself from it and what the ways out there are.

Short-term payment shortage or over-indebtedness?

If you have taken out a loan or made a purchase through installment payments, you are not automatically over-indebted. For such cases one uses instead the term of the debt. He says that someone has only debts. As long as you can settle these on your own, there is no over-indebtedness. The same applies if you get into short-term payment bottlenecks. These can be bridged by a deferral of the loan, in which the monthly installments are suspended for up to six months.

The way into the debt trap

If a longer-term insolvency occurs, which means that current liabilities can not be paid on schedule, the debt will increase and with it the risk of being unable to repay it. The Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ) defines over-indebtedness as follows:

If there is an over-indebtedness, this condition is also called a debt trap. The way out of default is then increasingly difficult. Here, the so-called compound interest effect plays an important role. The longer you pay off a certain amount, the higher the interest you pay. If you can no longer settle the interest fully, they multiply exponentially with their compound interest.

Over-indebtedness in Germany

Creditreform found that a total of 6.58 million people in Germany were over-indebted in 2013 – around 100,000 less than in 2012. Despite the good economic development in recent years, the number is still high. The Creditreform Debtor Atlas 2013 also sheds light on where the reasons for indebtedness are. In many cases, changes in family and economic conditions play an important role. Irresponsible consumer behavior is also a problem – especially among younger debtors. The study also shows that private over-indebtedness is predominantly found in cities. Negative leaders are Duisburg, Dortmund and Berlin.

Over-indebtedness in adolescents

Starting debt in adult life is not uncommon. According to Schuldner-Atlas, the number of young debtors under the age of 20 dropped by 3,000 cases to 213,000 in 2013 compared to the previous year, yet the debt ratio remains high in this age group. Particularly alarming: In the past ten years, the number of indebted youth has tripled. The Internet has a not inconsiderable share of it. With the many buying incentives and the simple possibilities of online shopping, buying by click is too tempting for many netizens. At the same time, the study also gives hope. Thus, the young debtors are obviously able to escape the debt trap faster.

Why are young people in debt?

In young people often leads an uneconomical approach to the existing financial resources to over-indebtedness. According to the Association for General Loan Protection (SCHUFA) several factors meet:

  • lack of life experience
  • low income
  • increased consumer demands

The most important debt factor in young people is the mobile phone . It is considered a status symbol that hardly anyone wants to do without. The Federal Statistical Office announced that borrowers under the age of 25 in 2013 averaged around 1,350 euros in telecommunications providers. This puts them well above the liabilities of older borrowers.

Rake purchases at online and mail-order companies as well as memberships in fitness studios play an increased role in the over-indebtedness of young people. The desire to belong, the many different ways of debt financing and the imitation of the lifestyle of the parents have at this age a major impact on consumer behavior.

What are the reasons for over-indebtedness?

job loss

Job loss is still the leading cause of over-indebtedness. Breaking the usual income and being replaced by the unemployment benefit I or ALG II, this means a big financial cut. Keeping up with the monthly repayments of a loan or installment purchase is then difficult. Unemployment is hit particularly hard by single parents and families in which only one partner is employed.

Divorce or separation

Changes in the family situation such as a divorce or separation from the partner are the second most common reason for over-indebtedness. The additional financial expenses incurred by moving or moving and paying maintenance are clearly noticeable. Maintenance payments are not only due in the case of common children. The more economically efficient ex-partner is required by law to pay the other maintenance if he can not make a living alone. It is difficult if the debtor denied the payment.


Diseases are the third leading cause of over-indebtedness. The importance of illness-related indebtedness has increased significantly in recent years. The financial problems usually start when, after six weeks, the sick pay replaces the previous salary. It is ten to twenty percent below the last net salary. It becomes particularly critical when the disease persists for a long time and additional costs for expensive drugs and therapies are incurred.

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Shopping Spree

Whether clothing, electronics or luxury items: If it is difficult to hold back when shopping and ill-considered purchases on the agenda, the risk of financial problems increases. If you fall into a veritable frenzy at the beginning of the month, it is difficult to pay running costs. If additional repayment installments for the repayment of a loan or an installment purchase are made, the way out of the financial misery is made more difficult.

The real relation to the money is lost

The variety of online shops, the ability to shop around the clock on the Internet, the relatively simple payment methods – always cashless by Paypal, credit card or on account: The virtual payment makes it difficult to keep track of the finances. Thus, liabilities accumulate at the bank, online shops and other creditors.

Lack of economic knowledge

Uneconomic housekeeping and increased consumption are also often triggers over-indebtedness. In this case, missing economic knowledge plays an essential role. To handle money carefully must be learned. The parental home has a role model function: For example, is a budget led to revenue and expenditure? The lack of knowledge is particularly noticeable in young people with debts that underestimate the cost of their own household, cell phone and Co. or can not sufficiently understand contractual arrangements.


Financing increases the financial scope and allows the purchase of car, house or furniture without the necessary equity. If the amount of repayment installments due monthly is not realistically matched to one’s own budget, even small unscheduled events lead to financial bottlenecks. If you are unable to meet due installment payments, the term of the financing will be extended, thereby increasing the interest portion. Financing in combination with other causes of indebtedness has a particularly fatal impact.

credit Facility

At the end of the month, do you occasionally use the overdraft on your current account? Many debtors are similar. It is quickly forgotten that financial gaps can hardly be bridged more expensive. Double-digit interest rates are already noticeable after a short time. If the disposition is used permanently and with high sums, the liabilities to the bank grow rapidly. It will be even more expensive if you cover the dispositions that are dependent on income. Then you have to pay additional overdraft interest, which is usually even higher.

Private loan agreements

Borrowing money from relatives or friends is not risk-free. Even if you can repay the money with little or no interest, it is debt. In addition, the supposedly favorable conditions can also have a negative impact on the payment morale. In the end, this often burdens not only one’s own finances, but also the personal relationship with the lender.

mobile phone contracts

Especially young people are often in debt to telecommunications companies. It is usually expensive mobile phones whose purchase price exceeds the actual financial scope. The ability to pay them off in monthly installments seems tempting. Come to these rates even expensive contracts with which apparently can be phoned for flatrate price and surfing the Internet, quickly accumulate debt. It is often forgotten that additional data volume, additional call minutes or SMS are significantly more expensive than the flatrate conditions suggest. The negative surprise can only be found in the monthly bill – provided it is viewed.

How to recognize a hazard

Do you occasionally take advantage of your checking account’s discretionary credit, finance new purchases through installment payments and are not completely sure about the long-term financial implications? Below, we have provided you with some clues to help you assess whether you are at risk of getting into debt.

  • The account is empty before the month ends – you tend to take advantage of your checking account.
  • You can not do without the new phone or game console. Clothes and appearance are also top priority for you. In addition, you tend to spend a lot of money on such consumer goods at short intervals.
  • You are reluctant to go to the mailbox. Letters from city institutions, bills and reminders do not open anymore. Also avoid the confrontation with the current account balance if possible.
  • When the monthly resources are exhausted, contact friends, family or acquaintances. If these could not help you, you would take out a loan to finance your current standard of living.
  • Whether clothes, furniture or electrical appliances – you like to shop and pay in installments.
  • With subscriptions and contracts, you lose track of prices, terms and notice periods.
  • Whether shopping online or in the supermarket – you always pay with EC or credit card.

If one or more of these points applies to you, you are not automatically faced with the debt trap. Nevertheless, you should pay more attention to your financial situation.

How do you protect yourself from the debt trap?

Keep a household book

Get a detailed overview of all your financial income and expenses. You should keep a budget book for that. Here you can use the classic book form or even the more modern form as an app on mobile devices. The app has the advantage that you do not have to laboriously maintain all income and expenditure by hand. The app simply sorts your bank statement and you get a comprehensive overview. This gives you an overview of your current financial situation.

You can see at a glance how much money is available if the rent and other costs have already been deducted from your salary. Based on this value, you should balance all purchasing decisions. Try to be rational and calculate all additional expenses over the long term. The investment in a private pension is advisable, the newest mobile phone, however, not mandatory.

Control your expenses

The type of payment can also affect consumption. Refrain from paying by debit or credit card only and withdraw cash instead. Paying in cash and looking into your wallet makes it easier to control your spending and your budget and leads to more conscious consumption. When paying for a card, such expenditure control is severely restricted. Here, too, help financial apps can credit cards and thus provide an overview.

Do you suffer from buying addiction?

Have your family and friends expressed concern about your consumption behavior or do you feel like you are losing control while shopping? Shopping addiction can also be a reason for over-indebtedness. The following features indicate a purchase addiction:

  • loss of control
  • Compulsion to repeat
  • dosage increases
  • Purchases that clearly exceed your own needs
  • Withdrawal symptoms such as inner restlessness, tremors and sweats
  • Short moments of happiness followed by guilt and depression

Get an overview of liabilities

Create a folder where you sort the documents by date and creditors . This applies to credit agreements, invoices, sales contracts, dunning and enforcement orders. The oldest letters should be filed at the bottom, the current ones at the top. This gives you a good overview of outstanding and regular liabilities. An indispensable prerequisite for getting an overview with a household book or a financial app.

Have fixed costs deducted immediately after your salary

Also helpful: If possible, set it up so that fixed expenses are deducted from your account as soon as you receive your salary. If rent, utilities and other fixed costs are deducted from wages, you have a good overview of your remaining monthly budget. If you have fixed expenses that are debited annually, create a separate account. You transfer a fixed amount monthly to this account by standing order, which then results in the required deductions at the end of the year. You can also easily set up standing orders via financial apps, as long as your bank supports this service. This allows fast and flexible handling of all standing orders and debits.

Helpful Helpers – Online Household Book and Smartphone Apps

Whether handwritten, as a software or smartphone app: To get an overview of your own financial situation, a budget book is indispensable. In this all income and expenses are clearly compared.

Numerous websites dealing with the issue of budgetary management offer the possibility of downloading online forms for the budget book. Here are usually different sample versions available.

On the revenue side all income is noted. Here you list expenses for rent, heating, electricity and car (including costs for leasing contracts, parking space, insurance, repairs and petrol).
These include wages and salaries, pensions, sickness, child, education and unemployment benefits. Annual costs such as the motor vehicle tax should be converted to the month.
Other income, for example from leases or leases, must also be listed on the revenue side. Other costs include telephone, internet, mobile phone, food, clothing, toiletries and leisure activities.
All revenues together make up the fixed monthly budget. Collect all receipts and receipts and staple them. This will give you an overview of the irregular issues.

Recognizing the problems: Household software

You do not want to burden yourself unnecessarily with additional papers? Then a household book software is a good alternative. This offers, for example, the advantage of being able to enter regular payments and receipts on a weekly, monthly or yearly basis. This saves effort and prevents positions from being forgotten. If the online budget book has statistical evaluation functions , it simplifies the computational effort and graphically illustrates the budget and the output structures. Incidentally, this does not have to be expensive: online you will find software for keeping a household book free of charge.

All revenue and expenditure in real time with an app

Entering expenses immediately after you have purchased something – with a budget book app, this is possible. Many programs for mobile phones offer a similar range of services as the software applications for the PC. In some cases, these can also be linked to online account management and online banking and thus support your banking business. You should make sure that the financial app of your choice offers password protection. So your data is also safe if you lose the phone or it is stolen.

Conclusion: To get out of the debt trap, you have to work hard – but it’s worth it

The way out of the debt trap is not easy – but it’s worth it . Even small measures can help. Create a budget book, control and reduce regular spending. This is a first step in the right direction. Seek professional help and restore your financial health. The current study by SCHUFA shows that prevention and early intervention also help . Use helpful tools like household books. Whether classic with paper and pen or online via smartphone app. Keeping an eye on your finances counteracts the debt trap. Try it out.