Over-indebtedness Procedure
Unexpected life events or poor budget management can sometimes push people into over-indebtedness. If this happens, dedicated advice services and a structured debt settlement procedure are available in Luxembourg to guide you towards a fresh financial start.
In Luxembourg, over-indebtedness is defined as the inability for natural persons to repay all outstanding non-professional debts when they become due. Over-indebtedness affects all social categories, without distinction. In other words, having more income does not protect against over-indebtedness.
Video explanation on the collective debt settlement procedure
Causes
There can be many causes for this. One of the causes stems from unforeseen life events, such as divorce, long-term illness, loss of job.
Another cause can be mismanagement of the budget. Accumulating loans, taking out credit lines with different credit institutions, not properly managing the family budget. All this can create an imbalance between income and debts, resulting in a situation of over-indebtedness.
If you are facing a situation of over-indebtedness, you can request help from one of the over-indebtedness information and advice services SICS (- Services d’Information et de Conseil en matière de Surendettement).
They can provide free advice, analyse your financial situation and provide information on the collective debt settlement procedure.
Inter-Actions a.s.b.l.
Tél.: (+352) 54 77 24 1
email : endettement@inter-actions.lu
Ligue Médico-Sociale
L-2181 LUXEMBOURG
Tél.: (+352) 48 83 33 – 300
email : endettement@ligue.lu
The collective debt settlement procedure
The aim is to help people get out of a situation of over-indebtedness, by allowing them to repay their debts on terms acceptable to all parties concerned. There are three phases to the collective debt settlement procedure. If one phase fails, you have the option of moving on to the next phase.
- conventional debt settlement phase.
- judicial reorganisation phase.
- personal recovery phase.
