Preventing and curing complexity debts with Aeslupa

No one is in debt for pleasure and financial problems are rarely a conscious choice. Yet debt and guilt seem inextricably linked. Are you in financial trouble? Then the credo is often: Own fault.
At Aeslupa we look at things differently. As legal administrators, we see that debt problems often arise from complicated procedures and opaque regulations. We speak of 'complexity debts'. Aeslupa is of the opinion that it is not the person with the debts who is to blame here, but that government agencies in particular are too complex and non-transparent. That is why it is all the more important for us to prevent and cure complexity debts. Read here how we do this.

Complexity debts in the picture

In theory, roughly two causes are given for the incurrence of debts[1]:

First, one distinguishes debts that arise as a result of a change in personal circumstances. For example, divorce, birth, death, pension or dismissal can lead to financial problems.

Secondly, spending proportionately too much money (due to psychosocial problems, addiction, compensation behaviour or overspending, for example) is cited as the cause of debt.

It is striking that it is always assumed that the debt results from financial obligations that you have - consciously - entered into. You have to make payments for goods or services that you purchase and can (no longer) pay for.

But this leaves debts that are the result of complex regulations out of the picture. While we see in our administration that complexity debts are common and require attention. That is why we put complexity within society and organizations on the agenda as the third cause for debt problems. And we offer support with the consequences of this.

Declarations and assessments

The government and the tax authorities in particular are major players when it comes to complexity debts.

For example, digitization is mainly causing older people to lose track when it comes to declarations. Although it is not mandatory to arrange tax matters digitally, doing declaration by post not encouraged. In order to arrange that, you have to take action, and not everyone knows that. Or if you want to authorize someone because the online declaration is too complicated, you do have to apply for a DigiD and activate it online. If you are not familiar with these procedures and there is no one to guide you, the consequences can be problematic, stressful and costly.

Another cause of complexity debts is the procedures surrounding surcharges. Aeslupa points out that a substantial group of private individuals is dealing with debts because they received too much allowance and have to pay back. The Court of Audit says the following about this:

"Although allowances are intended to provide income support at household level and thus the financial space of households, it has been pointed out by various bodies that the allowance system may be a risk factor for the creation of problematic debts."

Aeslupa knows the risks of the surcharge system and sees in practice what the consequences are. We have the knowledge and skills to prevent and cure problems arising from this system.

Preventing complexity of debts

Debts are more common than you think. Nibud calculated that no less than 32% of Dutch households are in arrears with payments. For Aeslupa, this is a signal that debt is not limited to a small minority with an excessive spending pattern. For millions of Dutch people, financial stress is the order of the day. And that's a shame. Because prevention is better than cure and clear procedures and rules could make a big difference there.

That is why Aeslupa wants to send a social signal by naming and questioning the problem. Especially when it comes to money, it is the responsibility of the government that vulnerable parties are not faced with unexpected financial surprises and payment arrangements. But until there is more clarity from above, Aeslupa focuses on preventing complexity debts by informing and guiding.

Do you want to avoid complexity debts? We advise you to inform yourself well anyway. Nibud provides a lot of information online about responsible budget management. If you want to know more about (digital) declarations, this signpost on seniorweb.nl is  a good starting point. Or call the tax telephone with questions or if in doubt about surcharges.

Would you rather talk to get things clear, or do you want to be relieved of bureaucratic hassle? Aeslupa can help prevent complexity debts by providing advice and, for example, guiding in making declarations.

Healing complexity debts

Not everyone is able to avoid complexity debt. In order to tackle complexity debts as well as possible, early detection is crucial. Especially for informal caregivers, caregivers and employers, there is an important role to play here. Because noticing debt problems at an early stage prevents worse. Because debtors sometimes try to fill one gap with another in good faith, debts lead to more debts and therefore more problems. In order to limit both individual and social damage, it is important to sound the alarm in good time.

Do you notice that someone in your area is in arrears, does not open mail, is stressed or does not show up for appointments? These can be signals that there are problematic debts. In that case, make the subject negotiable and make sure that you can give guidance to tackle the problems.

For this we have a list available online to recognize the signals. And here too, Aeslupa is available to think about and contribute to concrete solutions. We know the rules, the ways and the possibilities and are happy to offer a helping hand. Feel free to let us know if you have any questions or would like more information.

[1]  See De Greef (1992) and Boorsma et al (1994)

With budget management, advice and legal administration, Aeslupa helps people with their finances and financial affairs. Aeslupa takes away financial worries in a human way where necessary and supports independence where possible.