Debt; Counseling

Debt counseling is intended to provide comprehensive, personalized assistance; however, it cannot offer financial support to pay off debts. Based on the economic and personal circumstances of those affected, an individualized solution is sought together. Debt counseling aims to help individuals regain an optimistic outlook and actively plan their lives, while strengthening their ability to help themselves by raising awareness of the causes of excessive debt. Additional assistance includes drawing up a financial and repayment plan, negotiating with creditors, and providing support with debt restructuring in cooperation with banks.

Debt counseling is offered free of charge. All information provided by those seeking advice is treated as strictly confidential.

Debt counseling is the responsibility of the counties and independent cities. They fulfill this responsibility

• in part through their own municipal debt counseling offices,
• and largely through the counseling centers run by independent welfare organizations (Caritas, Diakonisches Werk, Arbeiterwohlfahrt, Red Cross, Paritätischer Wohlfahrtsverband).

You can obtain information about debt counseling centers in your immediate area from the responsible social assistance office (Sozialamt). A directory of debt counseling centers and recognized insolvency counseling centers in Bavaria can be found under “Further Links.”

Any private household in need of assistance or at risk of social decline is eligible for counseling.

A fundamental prerequisite for effective debt counseling is active and long-term cooperation between the person seeking help and the counselor.

Those seeking advice must be willing to

• disclose all debts and all sources of income,
• follow the debt counselor’s recommendations, adhere to agreements, and
• if necessary, change their household management practices.

Provided they are willing to accept these constraints, debt counseling has a good chance of success.

You should contact a debt counseling agency regarding your situation. The next steps will depend on your specific circumstances.

At the very first signs of financial difficulties, it would be wise to contact a debt counseling service—for example, if

• urgent purchases can only be made through installment plans,
• your account is frequently overdrawn,
• you start receiving initial collection notices from creditors.

Experience shows that the best results are achieved when help is sought early on. Therefore, you should not delay scheduling a consultation.

Please check with your counseling center to find out which forms you need.

Whether there are any deadlines to be observed—and, if so, which ones—depends on the individual situation.

• Please check with the respective counseling center to determine which documents are required. These may include, for example:
  
  • Documents Proving Excessive Indebtedness
  • Proof of income and expenses
  • Evidence of receipt of government assistance
  • Notices
  • Income tax withholding statement
  • Collection notices and current statements of claims
  • Garnishment orders
  • Notice of termination of tenancy, eviction
  • Cutoff of electricity and heat
  • Application for assumption of rent arrears
  • Application for protection against bank account garnishment
  • Proof of pending criminal proceedings

The consultation is free of charge.