Latvia remains one of the few countries in Europe where there are no state-funded consultations for people in financial difficulties. And there are many of them in the country.
Currently, 150,000 residents of Latvia are delaying payments on debt obligations for more than 60 days, with the amount of overdue payments exceeding 150 euros. If we add those who are still repaying loans but are already struggling to cover expenses, such as utility bills, the number of people in difficulty rises to 170,000. This data comes from the Credit Information Bureau, which summarized information on 1.2 million residents of Latvia. The Bank of Latvia noted that in recent years, the number of such debtors has not changed significantly, but the attitudes of the residents themselves have changed, according to LSM.lv.
"They are very disciplined. And people say: first, I will pay off the loan, and only then will I think about how to finance my, I don’t know, week or month," said Aija Brikše, head of the financial literacy department at the Bank of Latvia.
The Bank of Latvia acknowledged that additional consultations are often needed: the lender's offer is not always the most beneficial for someone facing financial difficulties.
"Most often, there are multiple obligations (...), and there is also a debt that needs to be repaid. How to understand how much to pay off on each of these loans? Some support is necessary here. This issue is already quite sensitive and complex, so, of course, individual assistance is needed," Brikše noted.
The Consumer Rights Protection Association also pointed out that many people seek advice, and recommendations from brochures are insufficient.
Starting from the end of next year, consultations for debtors should be ensured — this is stipulated by the European Union directive. The Ministry of Economics plans that the provision of this service could be entrusted to the non-governmental sector, and one option is the already mentioned Consumer Rights Protection Association. "In an ideal world, of course, the consultant should be both a lawyer and an economist, and also a psychologist, but unfortunately, we probably won’t be able to provide that, because the consultant needs to understand the problem, not, so to speak, blame the person," said ministry representative Didzis Bruklitis.
It is planned that at the first stage, the service will be provided by three debt consultants, whose work will be funded by the state. Consultations can be organized through unified service centers to make them accessible even in the regions.
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