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Norwegians drown in debt

More people are experiencing hard financial times and have to make arrangements to pay off their debt. During the first six months of 2004, the increase equalled 35 percent.

During the first six months of this year, 1037 people had made an arrangement to pay off their debt, according to the Norwegian daily Aftenposten. The law was instituted in 1993 after many Norwegians had too large housing mortgages that they could not pay.

«We are on our way towards new record highs,» said Per Ole Sørensen, enforcement officer at Bergen public registrar’s office, to the paper. «The problems are that we have gotten a completely new generation of people owing money who have problems paying back consumer loans.»

He confirms that there are many of the debt arrangement cases involve so-called «fast and cheap» consumer loans. Norwegian households have almost as large debt now as before the bank crisis during the 1980s.

«This isn’t news to us,» said Bengt Scheldt, head of Gjeldsoffer-Alliancen.

He mentioned several circumstances which have made the situation more difficult for people who have large loans; unemployment remains stable, at the same time as the period where the unemployed may receive unemployment benefits have been reduced from three to two years In addition, as of March 1, 2002, the debt collection fee became subject to VAT, and as of July 1 of this year, the court fees were significantly increased.

«These changes have made it much harder to pay bills which are delayed,» Scheldt said. «Many, who barely managed to pay the debt collection, will now be forced to throw in the towel and apply for a debt arrangement.»

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