Economy
Insolvency in Hungary not due to higher monthly instalments - survey
While umeployment still rates high among the triggers that eventually lead to bad debt, the figure is now lower than in the 2013 survey, Intrum Justitia found. While almost 50% of debtors were affected by the unemployment problem last year, the same issue was the key culprit in a slightly lower 43% of the insolvency cases in the 2014 survey.
This year's survey has revealed a decline in the number of clients who mentioned living on the dole as the reason for the inability to keep up with payments. The launch of the public work programme is the most likely reason for this change. Wage garnishment remains a major trend, having increased almost threefold since 2010. Intrum Justitia reached 80,000 debt restructuring deals last year, preempting legal proceedings against debtors, CEO Péter Felfalusi said.
The findings have also made it clear that high monthly instalments are not the reason for insolvency. Regarding loan payments, the positive impact of government assistance schemes for those in a foreign currency debt trap is clearly evident, with insolvencies linked to loans on the decline starting in H2 2012, followed by stagnation at 6% since H2 2013.
Wage garnishment is significantly higher in the banking sector (25%) than in the telecommunications and utility sector (10%). The survey sheds light on how struggling clients still fall behind with phone and Internet bills first. This type of default is typically due to short-term issues, while the banking sector's non-performing debt problem tends to stem from factors linked to the loss of a regular monthly source of income. The typical debtor falling behind with payments owed to a bank has already run up other debt.
This year's survey has revealed a decline in the number of clients who mentioned living on the dole as the reason for the inability to keep up with payments. The launch of the public work programme is the most likely reason for this change. Wage garnishment remains a major trend, having increased almost threefold since 2010. Intrum Justitia reached 80,000 debt restructuring deals last year, preempting legal proceedings against debtors, CEO Péter Felfalusi said.
The findings have also made it clear that high monthly instalments are not the reason for insolvency. Regarding loan payments, the positive impact of government assistance schemes for those in a foreign currency debt trap is clearly evident, with insolvencies linked to loans on the decline starting in H2 2012, followed by stagnation at 6% since H2 2013.
Wage garnishment is significantly higher in the banking sector (25%) than in the telecommunications and utility sector (10%). The survey sheds light on how struggling clients still fall behind with phone and Internet bills first. This type of default is typically due to short-term issues, while the banking sector's non-performing debt problem tends to stem from factors linked to the loss of a regular monthly source of income. The typical debtor falling behind with payments owed to a bank has already run up other debt.
