Debt Explosion since the financial crisis

Debt ExplosionDebt Explosion. Photo: pixabay.com

Last year 355,000 cases of debt were reported to the Namsfogden (Debt Enforcement Office), 80% more than in 2008. The Namsfogen in Oslo feels people are being approved for credit when they should have been denied.

The number of cases that end up at the Namsfogden in Norway has increased from 197,700 to 355,000 in eight years, writes Dagsavisen. This is an 80% increase.

– The numbers continue to rise, says Alexander Dey, Namsfogd in Oslo.

In Oslo, there has been an increase of 117%, from roughly 21,000 cases in 2008 to 45,500 cases in 2016.

– We are seeing that people in a weak economic situation are given credit. They have gained access to new credit when they should have been denied, says Dey.

He sees two possible explanations.

– Either the banks are knowingly lending money to people with low incomes, because there are high earnings when repayment is over a longer period of time.

Or, it must be from when defaults on payments are not leaving a trace which in turn does not affecting their credit rating.

The number of cases that end up at the Namsfogden is just the tip of the iceberg when it comes to debt collection cases, since it’s only unpaid debts from collections that have been reported.

Norwegian households owe over NOK 3.000 billion, including NOK 86 billion in consumer loans.

 

Source: NTB scanpix / Norway Today

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