More Swiss fall into debt trap

People often get into debt by buying or leasing a new car Keystone

More and more Swiss are finding themselves in debt due to the weak economy and unemployment.

The number of requests for advice from debt advisory bureaux has risen sharply over the past three years.

“Today people don’t mind getting into debt. This has something to do with individuality and defining yourself in society,” said Jürg Gschwend, president of the umbrella organisation of debt advisory bureaux in Switzerland.

His organisation has already noted 220 requests for help in the first half of this year in Lausanne compared with the 350 it received in the 15 preceding months.

It is estimated that around ten per cent of households in Switzerland have debt problems, but only a fraction come forward for help.

The organisation says that people who are in debt usually bury their heads in the sand and keep on indebting themselves by leasing cars or using credit cards.

Alarm bells

It is only when the debt spirals to tens of thousands of francs that the alarm bells start ringing.

The organisation says that getting out of the spiral of debt needs motivation, a willingness to change lifestyle and a great deal of patience.

“It’s also important that people learn to plan their expenditure,” added Gschwend.

But the body says that it cannot help every individual because a regular income is needed to make a budget plan.

Mario Roncoroni, head of the debt advisory bureau in Bern, says the plans must take into account life circumstances.

“A Bosnian mother whose child is in Bosnia will have high telephone costs. To take this away is not realistic,” he said.

Young people

Reno Sami, from the budget and debt advisory bureau in Basel, says debt is hitting young people particularly – around 30 per cent are estimated to have money problems.

He says that over the past 18 months the number of requests for debt help at the young persons advice bureau in Basel, which advises on all youth-related problems, has risen from 15 per cent to 65 per cent.

Sami says that debts are often provoked by a desire for designer clothes and a lifestyle that young people cannot really afford.

“Often parents take over the childrens’ debts,” says Sami, adding that the nasty surprise frequently comes later.

For this reason, Sami is helping to launch a national campaign aimed at preventing youth debt, which he hopes will start in December.

Gambling money away

Another group the organisation is targeting is gamblers. In Bern, a special project has been set up to help gambling addicts, which requires them to abstain for six months.

According to a recent study, 0.8 per cent of Swiss are addicted to gambling.

Gamblers are often about SFr110,000 ($81,000) to SFr40,000 more in debt than others with money problems.

swissinfo with agencies

In brief

More Swiss are getting into debt due to the weak economy and unemployment.

Debt advisory bureaux have recorded a huge increase in requests for aid.

Ten per cent of Swiss households have debt problems, but only a fraction seek help.

Often help is asked for only when the debt has run to tens of thousands of francs.