Towards a common operational European definition of over-indebtedness

Abstract

With the expansion of access to credit and the provision of new products in financial services, consumer over-indebtedness is increasingly moving into the focus of the European public. Yet, so far there has not been a standard definition of over-indebtedness which is accepted throughout the Union. This is one of the reasons why there are no comparable statistics about the current state, extent and past development of over-indebtedness within individual Member States. Such a lack hampers the evaluation of policy measures and undermines any well-founded discussion about the effectiveness of prevention measures. Against this background, the European Commission commissioned a study with the following objecticves: * To identify the nature and causes of over-indebtedness; * To review the definitions and measurement of over-indebtedness; and * To propose common definitions and indicators.