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Debt counseling in The Netherlands

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Debt counseling in The Netherlands. Albert Luten November 26, 2010. National Institute for Budgetinformation. Consumers information Website Leaflets, software Call center Press Professionals Courses Software. Debt regulation. Amicable debt settlement Social banks Social services

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Presentation Transcript
slide1

Debt counseling in The Netherlands

Albert Luten

November 26, 2010

slide2

National Institute forBudgetinformation

  • Consumers information
    • Website
    • Leaflets, software
    • Call center
    • Press
  • Professionals
    • Courses
    • Software
slide3

Debt regulation

  • Amicable debt settlement
    • Social banks
    • Social services
    • Others, ..
  • Legal debt settlement
    • Court
    • Since 1999

> After three years a fresh start

slide4

Repayment capacity

  • Early nineties: 3 methods
    • Detailed budget method
    • Global budget method
    • ‘Legal method’

> Unification was needed!

slide5

1999 Legal phase

  • All courts used the legal method
  • But many differences in interpretation
  • Sometimes large differences in outcomes
slide6

Recofa Commission

  • Develop one method / interpretation of the legal method
  • Simply: it must work for 95% of the cases
  • Develop software
  • Maintain the method
slide7

Law art. 475 d

  • Not seizable income:
    • 90% of the social minimum
    • Correction for rent
    • Correction for health insurance premium
    • Plus a ‘nominal amount’
slide8

Social minimum

    • In The Netherlands we have one social minimum:
    • 1300 euro per month for a couple.
    • 90% for lone parents
    • 70% for singles
  • Else: you have to make one:
    • Focusgroups (FBU, Un. of York)
    • Reference budgets
    • Other method: budget method
slide9

Rent correction

Rent 700

Rent in social minimum 220 –

Rent subsidy 350 –

Correction for rent: 130

- with a maximum

- service costs: partly

slide10

Housing costs

  • High rent: move or an extra (temporary) correction
  • Own house: sell it or same correction as rented house
  • Boarding money, children with an income
slide11

Correction health insurance

Total premium 200

In social minimum 45 -

Healthsubsidy 120 -

Correction 35

Own risk: payed from the estate when used

slide12

Legal part

Total net income 1500

90% social minimum 1170

Corr. rent 130

Corr. health ins. 35

Total corrections > 1335

Repayment capacity 165

slide13

Nominal part

  • The judge is free to decide upon this
  • The commission made rules for this part, so everybody is treated ‘equal’
  • Specific points: individual solution
slide14

Corrections nominal part

  • All costs that cannot be paid by the social minimum plus legal corrections:

- Corrections for subsidies

- Corrections for income earning costs

- Other costs

slide15

Corrections for subsidies

Households with a minimum income have higher subsidies: correction for households in debt advice that are also on a minimum level, but with a higher taxable income

Child allowance: say 120 at minimum, 80 with income 1500

Correction: 40

slide16

Corrections income earning costs

  • Standard 5% for people with work (stimulus)
  • Travel costs
  • Costs of childcare
  • Car: depends
  • Study costs: depends
slide17

Other costs

  • Costs of a handicap
  • To visit a hospital
  • ...

Not:

  • Donations to f.e. church
  • Transfers abroad
slide18

Nominal part

  • 5% extra for workers
  • Extra rent costs
  • Car
  • Childcare
  • Child allowance
  • Study costs
  • Alimony
  • Handicap
  • Other
slide19

Income

  • Only incomes that can be attached: wages, social benefits, tips, pensions, et cetera
  • Not: child allowance, subsidies, orphan benefit
slide20

E N D

  • www.nibud.nl
  • European Consumer Debt Network: ECDN

http://www.asb-gmbh.at/ecdn/index.php

www.referencebudgets.eu

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