Debts without shame: Luxembourg helps to get out of the debt trap
Towfiqu barbhuiya, Unsplash
The word "debt" often evokes shame or silence in society. But in Luxembourg, it is increasingly recognised that financial difficulties are not a personal failure, but a situation that everyone can fall into. To talk about this openly, the Ministry of Family, Solidarity, Living Together and Refugee Reception is launching the third National Debt Prevention Week, which will take place from 28 April to 2 May 2025.
The organisers - in partnership with the Inter-Actions Association ASBL and the Medical and Social Support League - aim to prevent, inform and stop people drowning in debt.
Luxembourg offers a clearly structured procedure for getting out of debt in a maximum of 7 years. It consists of three stages:
- Settlement Agreement - voluntary agreement through the Mediation Commission.
- Judicial reinstatement is a procedure before a justice of the peace.
- Personal bankruptcy is a last resort, also through the courts.
At all stages, people are accompanied by specialists: Inter-Actions and the Medical and Social Support League provide not only counselling but also long-term support to restore autonomy.
Contrary to stereotypes, working people (42 per cent) rather than unemployed people (11 per cent) most often join the procedure. An interesting fact: more than 64% of those applying are single people, and families with children - only 3%.
Age structure:
- 49% aged 31 to 50
- 45% are over 50
- only 6 per cent are under 30
Since 2014, the majority of cases (82%) have been resolved at the first, pre-trial stage. Only 7% go to personal bankruptcy.
During the prevention week, information stands will be set up across the country in railway stations and public places where help, advice and pedagogical materials will be available. There is also a special website: www.endettement.lu.
The state sends an important message: financial hardship does not make you a bad person. Both the system and society need to create space for help, not judgement. This is the basis of social justice.
