In economically depressed areas of Denmark, such as Lolland Council, ten percent of the population are behind on their bills. But even in affluent areas, like CopenhagenÂ’s tony northern suburbs, 2.5 percent of the residents owe creditors for products or services they purchased but never paid for, according to a new study by the credit rating agency Experian.
End-of-year reports from 2011 showed a worrying upswing in unpaid bills, consumer debt levels, and even homeless children across Denmark.
In 2009, at the height of the recession, 16 percent of the population did not have the cash to pay their bills. But two years later, during the recovery, 28 percent of the population does not, according to the financial supervisory authority Finanstilsynet.
The number of debtors has risen fast in the past two years, and ExperianÂ’s analysts also note that the amount owed has also risen sharply.
In January 2008, unpaid consumer debt totaled 7.4 billion kroner. In January 2012, it topped 13.5 billion kroner.
In 49 percent of all the cases of unpaid debts and delinquency, an unexpected expense Â– like a car in need of repairs or a broken appliance Â– is what pushed people over their limit. According to Louise SkjÃ¸dsholm, a department manager at Finanstilsynet, that fact is revealing.
Â“What it shows is that, at the most basic level, these people donÂ’t have any savings that they can draw on if something goes wrong and the refrigerator suddenly has to be replaced,Â” she told Politiken newspaper.
But for another group of Danes, it is not the surprises that push them over the edge into insolvency but rather predictable monthly expenses, like rent, that are beyond their means.
Two of the countryÂ’s largest rental management companies, KAB and Boligselskabet Danmark, are reporting a 25 percent increase in the number of forced evictions from the end of 2010 to the end of 2011.
In Copenhagen, city administrators have seen a ten percent increase in the number of forced evictions, where a bailiff shows up at a personÂ’s home and forces them to remove their belongings and vacate the premises on the spot. Children are involved in one out of every five of these evictions, Politiken newspaper reports.
Â“Ten years ago, we had one or two evictions per week. Now we have two every single working day Â– and thatÂ’s just at our company. And ten years ago, we almost never saw children in this situation. Now we see many,Â” KABÂ’s president, Jesper NygÃ¥rd, told Politiken.
NygÃ¥rd called the uptrend in children being evicted Â“horrendousÂ”.
In April 2011, the national association of regional councils, KL, and the national rental housing association, BL, produced a report documenting that the number of evictions increased from 1,823 in 2002 to 4,382 in 2010 Â– a 140 percent jump.
The vast majority of the evictions were due to a failure to pay rent. Most of the people evicted had lived in their residence for less than a year when the eviction process was initiated, leading KL and BL to conclude that people were being given leases they could not afford in the first place.
According to the housing minister, Carsten Hansen (Socialdemokraterne), the Â‘starthjÃ¦lpÂ’ programme, under which immigrants and other new arrivals received reduced welfare benefits, was a major factor in the rise in evictions over the last decade. The current Socialdemokraterne-led government eliminated that programme Â– which was introduced by the previous government Â– at the beginning of 2012, so that all welfare recipients now receive the same level of state support.
But more action is needed to reverse the trend in evictions and homelessness, said Hansen. Half of all the people evicted from their homes in Copenhagen had already been sanctioned by the council for such things as not paying their bills or failing to show up for job activation Â– suggesting that there are opportunities for earlier intervention than sending the bailiff.
KL and BL concluded in their study that an eviction ends up costing society more in the form of an emergency housing placement and emergency funds than earlier help would.
That viewpoint was shared by Sandy Madar, the founder of Den Sociale RetshjÃ¦lp Â– DenmarkÂ’s largest debt counseling service. She told Politiken that debt had become commonplace in Denmark.
Â“We are seeing a steady increase in these problems, and they are becoming more and more widespread. Debt grows quickly into a societal problem,Â” she said.