I am in debt, what are the consequences?

It is common that when you cannot pay your bills, you say you are in debt. It’s okay, but not entirely. Everyone is in debt at one time or another, if you have a debt to someone, you are in debt. Which is perfectly normal up to a point.

The real problem arises when the inflows of money are not enough to pay your current bills, and when these, therefore accumulate, we speak of over-indebtedness.


I am accumulating unpaid invoices, what will happen exactly?

debt loans

The accumulation of debts can have several consequences. An overdue invoice will first be reminded, then if it is still not paid, it could be prosecuted by means of a payment order, or taken up by a debt collection agency such as for example Intrum Justitia or Debitors Managment.


What if I have lawsuits?

money loans

After a few reminders, if the creditor decides to sue you, which happens in 99.9% of cases, the prosecution office in your region will send you a payment order. You will then have 20 days to settle this claim or object after which the creditor may request a requisition to continue the prosecution.

Once the requisition to continue the prosecution has been received and taken into account by the prosecution office, you will then be convened for a study of your financial situation which will determine whether or not you are seizable.

From there, one of two observations will apply:

There is a salary entry:

Based on the calculation of the subsistence minimum, any excess budget will be taken from you at source, therefore from your employer if you are employed to reimburse your creditors. Your goods can also be seized, here is an exhaustive list of what is or cannot be seized.

What is seizable:

  • Income (salary, unemployment, self-employed income)
  • Annuities from the 2nd and 3rd pillar
  • Real estate
  • Goods with a value greater than the estimated debt reimbursement costs (car, jewelry, paintings, etc.).

What is elusive:

  • AVS / AI annuities
  • Additional services
  • Family allowances
  • Benefits in the event of illness / accident
  • Indispensable items reserved for personal use (clothing, furniture, etc.)
  • Objects essential to the person in question as well as to his family (except luxury car for example)

There cannot be a salary entry:

Your lawsuit will then turn into an “act of want of property”.

When the act of default of goods is drawn up, the interest on this claim stops and even if you are not garnishable, the debt will remain valid for a period of you 20 years, after this period the claim will be expired.

However, a creditor can revive a lawsuit on the basis of an act of default of goods, and if the latter again leads to the issuance of an act of default of property, the period of validity will then be extended for an additional 20 years.

In addition, in the event that you return to better fortune during this period, the prosecution office may reassess your situation to determine whether a seizure is now possible.

If you are wondering how the prosecution knows that you have returned to a better fortune, it is the creditors who can revive an assessment of your financial situation at any time.


What is a collection agency?

loan collection agency?

Your creditor is not obliged to sue you, he can also decide to assign your debt to a collection agency, either at low cost, or because they regularly mandate this type of collection agency to deal with of their litigation. In concrete terms, the advantage for a creditor of using such an agency is to save time and money.

To find out more about collection agencies, their fees and costs, click here.


Do you have debts?

Do you have debts?

No worries, you are no longer alone, and you have the possibility of speaking to professionals, who will be able to accompany you throughout your deleveraging process.

It is important to get help in case of debt, and not to be left alone in front of your arrears.

The pressure from the creditors is too heavy in addition to all the other things that you have to manage apart from your bills.

We are here to help you, and accompany you, and this without any judgment and with encouragement.


Debt restructuring with Credit Bureau entry

Those who are in debt are not only plagued by a guilty conscience, but not infrequently by the worry that the amount of debt will increase. Because if bills cannot be paid and reminders land in the mailbox, the total increases with every further reminder. In fact, it often happens that the fees for lawyers, bailiffs, reminders and processing fees exceed the original amount.

A permanently overdrawn checking account also contributes to further indebtedness, because the interest on the overdraft facility is often 15 percent or more. Overdraft interest is even added. Anyone who cannot manage such debts on their own within a short period of time or the creditor does not accept payment in installments needs rescheduling with a Credit Bureau entry. Because the Credit Bureau entry should already exist for permanent liabilities.

Check Credit Bureau yourself

Check Credit Bureau yourself

However, it can also be worthwhile to simply request your own Credit Bureau information directly from Credit Bureau. This has even recently become free of charge and can also be applied for online. If there is actually no Credit Bureau entry at all, it is advisable to negotiate a normal loan with the house bank or to search for a normal loan in the online loan comparison.

Because a debt rescheduling with Credit Bureau entry is usually somewhat more expensive than taking out a loan with the normal Credit Bureau procedure. This is because banks at home and abroad, as well as credit intermediaries who offer a Credit Bureau-free loan, have to compensate for a higher risk with slightly higher lending rates. Nevertheless, it can be worthwhile for you if you only consider the example with the 15 percent interest pa of the overdraft facility, which is offset by a debt restructuring of 5-8 percent pa with a Credit Bureau entry. You save money from the first day of debt restructuring.

Debt restructuring creates an overview

Debt restructuring creates an overview

Another advantage of debt restructuring is that many claims are bundled into one. It can be very stressful not to have a good overview of the creditors. Many creditors also pose a higher risk of encountering a bailiff at the front door, because with a large number of reminders and sometimes incomprehensible letters and requests, it is difficult to set priorities.

However, if you risk a debt rescheduling with a Credit Bureau entry, you can settle all claims at once and unforeseen debits from your account no longer occur. You then only have to pay one installment each month. This again leaves you room for maneuver and planning security.

Use credit comparison

Use credit comparison

If you should now decide to reschedule with a Credit Bureau entry, you can use the free and non-binding online loan comparison. This program enables you to get a quick overview of the best schufa-free loans on the net. Large and smaller credit institutions, direct and foreign banks and credit intermediaries are listed. Almost everyone accepts your request for a loan of 1000 – 25 000 USD even if your Credit Bureau information is negative. However, the other requirements of your credit rating should be correct.



A bank or credit broker will only give you a loan if you are able to repay it on time in monthly installments. A debt rescheduling with a Credit Bureau entry is only possible if your monthly income exceeds the monthly expenses. You should have a permanent job, be of legal age and reside permanently in Germany.