Going into debt is common. But when should you be concerned? Discover the signs of over-indebtedness, its common causes, and possible solutions to regain control of your finances.
When debt becomes over-indebtedness
Going into debt is common: an open bill, an ongoing loan, a payment in instalments... As long as everything is under control, there is nothing to be concerned about.
But as soon as debts accumulate to the point of exceeding your monthly income, the financial balance becomes unstable.
Over-indebtedness occurs when you can no longer cover your fixed expenses, rent, bills, repayments, with what you earn.
This imbalance can affect anyone, regardless of age, income or family situation.
It often appears during life transitions: separation, job loss, birth, moving house or sudden change in the budget.
Figures that speak for themselves
According to the Federal Statistical Office, around 40% of people living in Switzerland belong to a household that is considered over-indebted.
This figure is a reminder that debt is not a sign of personal failure, but a widely shared social reality and that action can be taken before the situation gets worse.
Understanding the impact of a loan on your budget
Before taking out a loan, it is essential to measure the impact on your personal budget.
Each new loan involves a fixed monthly payment to be repaid: it is added to your existing charges.
In concrete terms, this means that your disposable income (what you have left after all the compulsory expenses) decreases.
If this share becomes too low, the risk of imbalance increases.
Example: If you earn CHF 4,000 net per month and already pay off CHF 1,200 in loans, a new monthly payment of CHF 400 would bring your total debt to CHF 1,600, or a debt ratio of 40%, above the recommended threshold.
Factors driving debt
Several causes can contribute to a situation of over-indebtedness, often combined with each other:
- Lifestyle : consumption habits not adapted to disposable income
- The financial situation : low wages make you more vulnerable to the unexpected
- Family situation : separation or change in household structure
- Education and profession : profiles with few qualifications are more exposed
- Where to live : In some areas, fixed costs exceed average income
When debt becomes a burden: what to do?
Living with uncontrolled debts means living under stress.
Invoices are postponed, reminders are ignored, and in the meantime, interest is added, legal actions may follow. Stress can become chronic.
But it is possible to regain control. The important thing is to act early, before the situation becomes irreversible.
Talking about it, getting help, considering concrete solutions: these are the first steps towards a return to balance.
Milenia helps you avoid falling into over-indebtedness
At Milenia, we know that sometimes it's hard to stay on track, especially when bills pile up.
That's why we encourage those affected to take action before the situation deteriorates.
In some cases, a debt consolidation (or loan repurchase) can be a relevant solution: it allows several receivables to be combined into a single loan, with a single monthly payment, more suited to the budget at the time.
This type of solution alleviates financial pressure and can avoid tipping into real over-indebtedness.
At Milenia, we are here to support you, not to judge you. One step at a time, you can regain financial stability and peace of mind.