Origin and development
Debt counselling is quite a new field within social work. It was only introduced at the beginning of the eighties starting with a few debt advice centres. Since then, this field has been continuously growing with the main extension of activities taking place between 1985 and 1995.
During the following 10 years the number of indebted and overindebted private households kept rising as did the related problems such as living on welfare, among others. Municipalities, charity organisations and private organisations increasingly offered advice to the households affected, either in the form of specialised debt advice or as part of other advice offers. Today there are approximately 1,050 debt advice centres in Germany, with about 1,700 advisors working full and part-time. However, from the start to the situation we have today there have never been enough advice offers to at least approximately cover the existing need for advice.
In May 1986, 30 members founded the BAG-SB. This initiative had its origin in the need to structure, systematize and qualify the exchange of information as well as training and further education of the advisors. Furthermore, the members wanted to examine the social circumstances of overindebeted people and to develop professional standards not only regarding the solution of individual problems but also involving economic and social-political structures.
The BAG-SB represents the unitary approach to the overindebtedness situation in Germany. That means that not only the individual psycho-social and economic situation of the individual persons affected come into view but also the legal, economic, social and cultural backgrounds related to indebtedness and overindebtedness.
Structure and number of members
The BAG-SB is independent from political parties, religious denominations, associations or other social institutions. It cooperates with every institution relevant to debt counselling and is established as a non-profit association.
The BAG-SB members belong to many different professional groups, a fact that also expresses the association’s unitary approach. All professional groups working in the context of indebtedness or overindebtedness are represented in the BAG-SB. Members are working, for instance, in the fields of social work, economy, legal advice, pedagogy, nutritional science and home economics, psychology, banking industry or administration. They are employed at independent non-profit associations, municipalities, consumer advice centres and charities.
The BAG-SB as an umbrella organisation provides the opportunity to make contacts and keep them. There are approximately four hundred members. Of these, approximately 120 members are legal entities, for instance municipalities (e. g. Hamburg, Munich, Frankfurt on Main), charities, consumer advice centres and non-profit associations.
Overindebted households in Germany
The Bundesarbeitsgemeinschaft Schuldnerberatung e. V. (BAG-SB) has pointed out the further dramatic increase in overindebted private households. On the occasion of the annual conference at the 20th anniversary of the nationwide umbrella organisation for debt counselling in Berlin on 10th and 11th May, Werner Sanio, board member of the organisation, said: “The situation for both people affected and advisors in advice centres is constantly deteriorating. At the beginning of 2006 the number of consumer insolvencies alone had seen an increase of 40 percent compared to the same period of the previous year. At the same time the number of advice offers is decreasing in many places because of less public funding.”
In 2005, there have been about 95,000 private insolvencies. Nationwide more than 3.1 million households are regarded as insolvent, a good 8 percent of all households. In the eastern federal states the situation is particularly drastic with 12 percent of all households being insolvent. In the western federal states more than 7 percent of households are concerned. The main reasons for financial plight are long-term unemployment, decreasing real incomes and critical personal events such as divorce, disease, addiction problems etc.
This text is taken from the BAG-SB’s press release of 11 May 2006.