In Luxembourg, an average of 60 debt settlement procedures are launched each year. And yet, the fact that over-indebtedness can affect anyone, regardless of age or background, is often overlooked.
While people living alone account for the majority of cases (63%), couples, families, and single parents – with or without children – are also vulnerable to falling into debt traps. The root cause is frequently the same: someone borrows money but eventually finds themselves unable to keep up with repayments.
According to Family Affairs Minister Max Hahn, certain life events or warning signs often act as triggers: “Once someone reaches the point where they realise, ‘I can’t afford any unexpected expenses, like needing to replace my car after an accident’, that’s already the moment to reach out for help.”
Speaking to RTL, Minister Hahn points out that there are various support organisations able to help in such instances: “Our partner organisations are there to offer guidance, help set up a financial plan, and support people in organising their personal budgets. They take a comprehensive look at both sides: what income is coming in, and what recurring expenses are going out. From there, they can determine what budget remains, for instance, whether it’s realistic to take out a loan for a new car.”
Hahn further notes that the situation often worsens in a snowball effect: “As I said, professional support is available to help manage what many can no longer handle alone, often out of desperation, especially when several loans are already in play. It’s usually the accumulation of multiple debts and loans that turns into the real problem.”
In Luxembourg, professional help is available for those who have fallen into debt. The main points of contact are the non-profits Inter-Actions and the Medical-Social League (Ligue Médico-Sociale), both of which work closely with the Ministry of Family Affairs.
The key word here is prevention, according to Hahn: “There’s been a structured procedure in place in Luxembourg for the past eleven years. In the first phase – coordinated by us – we sit down with the individuals to review their budgets and outstanding debts. Together, we aim to create a repayment plan with creditors that protects the person.
“That means no more interest charges, no seizures, and a clear path forward with the goal of becoming debt-free within seven years. This might involve lowering monthly payments or even reducing interest rates long-term.”
Next week marks a campaign to raise awareness about the support systems in place in Luxembourg for people facing financial distress. The message is clear: no one should feel ashamed or stigmatised.
If you’re struggling to keep up with repayments, know that help from the aforementioned services exists; it is personalised, confidential, and focused on getting you back on your feet. You can find more information about the subject here.
