Abridged English version of the SCHUFA Credit Compass 2008

Debt Compass | Overview of Analyses and Core Findings
10
EXTERNAL ANALYSES
Analysis B:
Evaluation of debt advisor data
The Statistische Bundesamt (Federal Statistical Office Germany) has organized voluntary overindebtedness
statistics since reporting year 2006, in order to further develop social reporting data
records. The statistics presented in the excerpts draw on data from debt advisory services as well
as figures from official insolvency statistics. Although individuals who visit a debt advisory service
need not be over-indebted, nevertheless this survey can clearly improve data records regarding
the situation of individuals and households who are in financial difficulties or even over-indebted.
In reporting year 2007, 212 (of 950) advisory services in Germany have taken part in the voluntary
survey and supplied anonymized details for approximately 57,000 individuals. The analysis
yields information about the triggers of over-indebtedness and about the group of people that
is most likely to be affected by over-indebtedness. In addition, it examines the socio-economic
patterns of individuals who sought advice, as well as the average amount of indebtedness.
Core Findings
From 1999 to the present, nearly 500,000 consumers have filed for insolvency hoping to overcome
their financial difficulties. The number of proceedings rose from year to year up to approximately
105,000 petitions in 2007, of which only a few were rejected. At year's end in 2007
and in the first half of 2008, however, a slowdown became apparent for the first time since the
implementation of the 1999 Isolvenzordnung (German Insolvency Act). 48,000 consumer insolvencies
were granted in the first half of 2008, 7 percent fewer than the previous year. Debts
averaged 59,000 Euro, roughly a third of the average sum for 2001. In 2007, 41 percent of individuals
who sought debt advice were less than 10,000 Euro in arrears to their creditors. Just
short of 8 percent of individuals who sought advice had debt levels that exceeded 100,000 Euro.
Among individuals who neither had mortgage loans nor were independent of debt, just under
half of all debts were to banks in the form of overdraft credit or instalment loans. Following far
behind were debts to collection agencies (12 %), to public creditors (7 %), to private individuals
(4 %) and to landlords (4 %). A further cause is uneconomical household management (9 %),
among which failed home loans were cited only in relatively few cases (4 %) as the leading cause
of over-indebtedness.
Analysis C:
Trend in the extent of over-indebted private households in 2007
Over-indebtedness analyst Gunter E. Zimmermann analyzes the number of relatively over-indebted
households on the basis of data from the 2007 Sozio-oekonomische Panel (SOEP) (The German
Socio-Economic Panel) and demonstrates the trend of private over-indebtedness in Germany from
1997 to 2007. It is emphasized that the SOEP data are representative for the entire population
and the analysis does not rest on private insolvency alone. A distinction is made between overindebtedness
on the basis of consumer debt and/or mortgage loans. In addition upper and lower
limit of over-indebtedness is described, in order to emphasize that the number of over-indebted
private households depends on the definition: depending on whether the cost of living is based
on social assistance rates (lower limit of over-indebtedness) or on the rates used for exemptions
from attachment (upper limits of over-indebtedness), different total numbers of over-indebted
households in Germany are generated.