Municipalities and debt counseling

Do you work for a municipality and do you have to deal with residents who are or have been entrepreneurs and who have financial problems? Then the information below is intended for you. Here you will find more information about the benefits of debt counseling for entrepreneurs and the collaboration with Zuidweg & Partners.

Debt counseling in the interest of our society

The number of small businesses has grown rapidly in recent years. Of the 2 million companies in the Netherlands at the moment, 1,1 million are self-employed. Doing business is risky and self-employed people are an extremely vulnerable group. More than half of all self-employed people close their business within 5 years, 60% of them for financial reasons. In the corona year 2020, the number of quitters was well above the normal level. The increase in the self-employed therefore also means an increase in people with financial problems. More and more self-employed people run the risk of ending up below the poverty line, while the number of employed people who end up below the limit has actually fallen in recent years.

Debt counseling is a challenging task

Debt counseling is a legally and socially challenging task. The entrepreneur's debts must be inventoried, the accounts must be put in order and it must be determined how much of the debt can still be paid. A proposal is then made to the creditors about how much the entrepreneur can pay.

Entrepreneurs in financial difficulties need a lot of support and attention. Debt is an enormous psychological burden. The entrepreneurs suffer from strong feelings of shame, being alone, fear and loss of control. In this situation, personal relationships with partners, family members and friends are often severely affected.

The benefits of debt counseling

From the investigation Debt counseling pays off (2011), conducted by Hogeschool Utrecht, it appears that debt counseling in several areas leads to significant cost savings. Every euro spent on debt counseling yields between € 1,70 and € 2,60. The biggest savings are on the grounds benefits en live made. People who receive debt assistance need less benefit between 4 and 12 months. For families this saves more than € 5.000 (at four months) to € 16.000 (at 12 months). For every 100.000 inhabitants, this is a saving of € 1.285.000 to € 3.854.000. With regard to the terrain live debt counseling prevents housing associations from having to make payment arrangements and evacuate homes. This saves € 100.000 per 406.000 inhabitants.

The aforementioned research is aimed at private individuals with debts. Savings are considerably higher for entrepreneurs due to the more complex debt situation. Entrepreneurs with financial problems have an average of € 142.413,09 in debt spread over some 18,4 creditors. In addition, these entrepreneurs deal with clients, customers and employees who suffer increasing damage.

Collaboration with Zuidweg & Partners

Zuidweg & Partners has been providing debt counseling for entrepreneurs. As an independent and impartial mediator, our goal is to achieve the best outcome for all parties. We now work with more than 170 municipalities and have assisted 40.000 entrepreneurs since its foundation. As a member of the NVVK (branch organization for debt counseling and social banking) we follow the NVVK code of conduct. We are also registered with the Dutch Data Protection Authority.

The spearheads of our services are legal and tax expertise, independence and personal support for the entrepreneur. For more information click here.

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