Facing debt with dignity: 11 practical solutions

I have debts, what now?

Practical solutions for getting rid of debt.

Debt can affect anyone, but with the right strategies you can face it with courage and fighting spirit. As the saying goes: "What doesn't kill you makes you stronger." Every situation you overcome, including financial debt, makes you richer in knowledge and experience.

We have analyzed various articles on online portals and found most of the advice to be impractical or self-evident. For example, the suggestion to rent out rooms in your own home is irrelevant for many people because they don't own their own home. Advice such as shopping at food banks and second-hand stores is also taken for granted if you have already made it that far.

Here are ten concrete ways in which you can actively improve your financial situation:

1. set up a seizure protection account

If you have not yet set up a P-account, you should definitely do so now. This will protect 1,500 euros a month from seizure and secure your livelihood.

2. create a realistic financial plan

A solid financial plan is the foundation for financial stability. It helps you to clearly understand your situation and take targeted measures.

• Analyze your income and expenses carefully.
• Identify potential savings and set priorities.
• Use AI instead of budgeting apps, AI is free and ad-free.
• Set yourself realistic, measurable targets for savings and debt repayment.

3. negotiate installment payments

Many creditors are open to negotiation if you communicate proactively. A fair agreement can help both sides.

• Contact your creditors proactively and explain your situation.
• Suggest realistic installment payments - this often works surprisingly well.
• Ask for a reduction or temporary deferral of interest.
• Document all agreements in writing.

4. develop additional sources of income

Generating more income can significantly improve your financial situation. Be creative and open to different possibilities.

• Look for opportunities for side jobs or freelance work.
• Sell unused items online or at flea markets.
• Ask acquaintances and relatives for odd jobs.
• Check possibilities in the sharing sector (e.g. car sharing, tool rental).

5. build up a financial safety net

An emergency fund gives you financial security and reduces stress. Even small amounts can add up to a considerable cushion over time.

• Try to set aside even small amounts regularly.
• Open a separate savings account for emergencies.
• Set yourself realistic savings goals and increase them gradually.

6. check your credit options for consolidation

Restructuring your debt can simplify your financial situation and potentially lower your overall costs.

• If you have several small debts: Consider debt consolidation.
• A single loan to pay off all debts can make the situation more manageable.
• Carefully compare the conditions of different providers, use KI.
• Watch out for hidden fees and read the small print.

7. seek professional help

Experts can offer you valuable insights and support. Don't be afraid to take advantage of these free resources.

• Contact a free debt counseling service in your area.
• Take advantage of the advice offered by consumer advice centers.
• Find out about state support options.

8. optimize your expenses

Small changes in your daily spending can add up to significant savings. Critically review where you spend money.

• Cancel unnecessary subscriptions and memberships.
• Systematically compare providers for insurance, electricity, internet, etc.
• Cook your own meals instead of buying ready meals - it's healthier and cheaper.
• Plan your meals in advance to reduce food waste.

9. actively build up your financial knowledge

Financial education is a key to long-term financial success. The more you understand, the better decisions you can make.

• Take advantage of free online courses, YouTube videos on topics such as budgeting, investing and debt management.
• Read blogs or listen to financial podcasts.
• Attend free workshops at local banks or consumer advice centers.

10. invest in your professional development

Your skills are your most valuable asset. By expanding them, you increase your earning potential.

• Identify the skills in demand in your professional field and acquire them.
• Take advantage of free online training opportunities.
• Network actively to open up new career opportunities.

11. maintain a positive attitude

A positive mindset can help you stay motivated and see challenges as opportunities.

• Keep a success journal to record your progress.
• Practice gratitude for the positive aspects of your life.
• Set yourself new, achievable goals on a regular basis and celebrate your successes.

Remember: every step towards financial stability is a success. With perseverance and the right strategies, you can improve your situation sustainably and grow personally in the process. Don't be afraid to accept or ask for help - whether from family, friends or professional advisors. Together you will find a way out of the financial challenge.

Frequently asked questions about debt and insolvency

Can you go to prison for debts?

1. Can I work in Europe be imprisoned for debt? The 4th Protocol to the European Convention on Human Rights (ECHR) expressly prohibits someone from being deprived of their liberty simply because they are unable to fulfill a contractual obligation. In most European countries, including Germanythe practice of debtors' prisons was abolished in the course of the 19th century.
2. Are there exceptions where debt can lead to a prison sentence? Yes, in certain cases it can indirectly lead to a prison sentence:
   • With Tax evasion or social fraud
   • Failure to submit an affidavit (statement of assets)
   • In the event of intentional breach of maintenance obligations
3. What happens if I can't pay my debts? Instead of imprisonment, there are civil law consequences such as seizures, negative Schufa entries or, in the worst case, insolvency.
4. Can I be forced to make an affidavit? Yes, a court can oblige you to do so. If you refuse to do so, there is a risk of enforced detention, but this will be lifted as soon as you make the declaration.

When is insolvency a good option?

1. In which situations should I consider insolvency?
   • If your debts significantly exceed your assets and income
   • If you see no realistic chance of repaying your debts in the foreseeable future
   • If creditors have already initiated enforcement measures
2. What are the advantages of insolvency proceedings?
   • Protection from creditors and enforcement measures
   • Possibility of residual debt discharge after 3 years
   • Orderly debt settlement process
3. Are there any disadvantages in the event of insolvency?
   • Restrictions on financial freedom of action during the proceedings
   • Possible negative effects on creditworthiness
   • Obligation to surrender part of the income
4. How long do insolvency proceedings take? Usually 3 years, in certain cases it can be extended to 5 years.
5. Can I keep my job during insolvency? Yes, you can and should continue to work. However, part of your income will be used to pay off your debts.
6. Should I seek professional help before deciding to file for bankruptcy? Yes, it is advisable to seek advice from a debt counseling service or an insolvency lawyer to examine all the options and make the best decision.