Rising Long-Term Debt Issues Prompt Government Review in Sweden
Sweden faces a growing crisis of long-term debt, prompting government investigation into relief options.
Key Points
- • 437,000 debtors registered with Kronofogden in Sweden.
- • 97,433 individuals have been in debt for over 20 years.
- • Increased awareness about debt restructuring needed for long-term debtors.
- • Government exploring legislative changes like absolute prescription for debts.
A growing number of Swedes are facing long-term debts, with recent statistics revealing that 437,000 individuals currently owe money to Kronofogden, the Swedish Enforcement Authority. Alarmingly, one in four of these debtors, classified as 'evighetsgäldenärer', have been in debt for over two decades, indicating a troubling trend in chronic indebtedness.
As of 2023, the number of long-term debtors has increased to 97,433, up from 94,350 the previous year. This demographic often includes individuals who have encountered significant life-altering events, such as divorce or the failure of a business venture, which exacerbate their financial challenges. Erik Borgström, a manager at Kronofogden, notes that many in this group tend to struggle with mounting costs and interest rates, making it increasingly difficult to escape the cycle of debt.
Despite options for debt restructuring being available, awareness remains low among long-term debtors. Many are unaware that they might qualify for assistance, largely due to misconceptions and the stigma surrounding debt. Borgström points out that education on available support, such as help from municipal budget and debt advisors, is critically needed to assist these individuals in finding relief.
In response to the deepening issue of over-indebtedness, the Swedish government has initiated an investigation to explore legislative changes aimed at aiding those in chronic debt. One proposal under consideration is the introduction of absolute prescription, which would set a time limit on a debtor's obligation to repay. While this change could offer much-needed relief to long-term debtors, Borgström warns of potential risks, including the possibility that debtors might become complacent and the imposition of stricter regulations on lenders.
The current situation underscores the urgent need for increased awareness and action to support individuals struggling with long-term debt in Sweden, as they face the daunting challenge of financial recovery.