Fact: So many people are in debt in Sweden
393,781 people were registered with the Kronofogden at the turn of the year, an increase of 0.7 percent compared to the previous year.
The total debt of private individuals stands at a record high of SEK 109.7 billion, an increase from SEK 101 billion since the turn of the year. The median debt per person was SEK 70,700 at the turn of the year.
80 percent are debts to private individuals and companies, which are, for example, linked to loans, credits, consumption and telephony. The remaining 20 percent are debts to the state and municipality.
Statistically speaking, the people in the Kronofogden’s register have a lower level of education, lower employment rate and half as much income, compared to the corresponding group in society who do not have debts.
Two-thirds of the people are men, the average age is 46 years and there is a strong over-representation of foreign-born people in the statistics.
Source: Crown bailiff
Swedes’ debts are at historically high levels. Around 400,000 people have debts of a total of 110 billion with the Kronofogden. And according to the authority’s forecast, the mountain of debt will continue to increase over the next year.
In some cases, it is ignorance that is behind the fact that you end up with the Norwegian Kronofogden, says Davor Vuleta, analyst at the Norwegian Kronofogden.
– You may not know that debts from the state go so quickly to the Kronofogden. You think you should receive a letter from debt collection. But it doesn’t work that way, government debts go directly to us.
Debts from the state are not tried either, he says, the Crown has the right to collect them directly. In the case of individual cases, on the other hand, i.e. payment claims from companies or private individuals, the Kronofogden must first examine whether the debt is correct.
— We contact the person and say “this company says you owe them SEK 500, is that correct?”. If the answer is yes, then we will collect the money.
“If, on the other hand, you dispute that you owe the money, it will be sent to the District Court and then it will be decided which of you is right,” he says.
Investigation of assets
When a debt is to be pursued, an investigation is first made of all debts and assets, says Vuleta.
— In the first place, they look at whether there are cash or bank assets with which the debt can be paid. If you don’t have it, then we look at the income and see if we can make a wage garnishment.
In the event of a wage garnishment, you may retain a so-called retention amount of SEK 5,717, plus housing costs. But for wage garnishment to become relevant, the debts must be paid off in 12 months, says Vuleta.
— If it were to take longer than that, then we will look at whether we can seize other property instead. For example, it could be funds and shares, or things in your home that are of value.
— Ultimately, we look at real estate. We will try all the other steps before we should foreclose on the property.
The starting point is that debt collection should take place with as little intrusion as possible into the private life of the debtor.
— If the debt is 300,000 and we see that there is an immovable property that we can seize to get the debt paid. Then we will not make a wage garnishment decision, because it is unnecessary to both have ongoing wage garnishment and to simultaneously seize real property to get the debt paid. It will be double forced use.
More are seeking debt relief
If you have such large debts that you cannot pay them in the foreseeable future, you can be granted debt restructuring. Then you pay off as much as you can on the debt over three or five years, after which it is written off.
More and more people apply for debt restructuring, but the majority of them are rejected. Approximately 30–40 percent of those who apply are granted.
— If you are 25 years old and have a debt of 100,000, then there is not as great a chance that you will be granted debt relief as if you are 70 years old with an income below the reservation amount and have a debt of 20,000. Because when you are 70 years old, there is very little chance that your income will change.
To avoid debt, it’s important not to shop for money you don’t have or won’t have when it’s time to pay, says Vuleta.
— But if you still end up in financial trouble: open the letters. The worst thing you can do is bury your head in the sand.
— Contact those you owe money to or contact budget and debt advisors. Then there are opportunities not to end up with the Crown Bailiff.