The Norwegian Financial Supervisory Authority recently presented figures showing that debt collection has fallen from NOK 114 to 112 billion.

My immediate reaction is that this is good, but I am actually surprised that the decline was not much greater. Given the high savings rate, and the low consumption during the pandemic. But what really worries me is the strong rise in old, unsettled debt collection cases (over 18 months). It has risen from 68 billion last year to 76 billion kroner so far this year! It's anything but good.

I've been working on ending people's personal finances for 21 seasons of The Luxury Trap: getting an overview, cutting costs, selling assets, negotiating debts. Here I want to share them the advice we follow ourselves to help people out of debt, so you can do the work yourself - or give advice to friends, family or colleagues who are struggling with high debt. All this without me knocking on the door with a television crew and a power of attorney, or show where the shoe presses by building sky-high towers a v the consumption! Here is my advice.

STEP 1

Get an overview: This is the most important job! Therefore, use an extra day or two for this job. So that you are absolutely sure that you have taken absolutely everything with you. Obtaining an overview of all debts and debt collection cases for a person is unfortunately a time-consuming operation. You have to go through old mail, check tax returns and make a lot of phone calls. But, it is the most important job to save your own finances. Because if you slouch here, you will quickly find yourself back in the backlog.

Start with, for example, Gjeldsregisteret.com. There you will find an overview of your unsecured debt. By unsecured debt we mean credit cards, consumer loans and shopping accounts.

Take a credit check: When Elkjøp, DNB, Telenor or others companies want to check your creditworthiness, they contact a credit rating agency. If, for example, you have a payment notice as a result of a long-term debt collection case, this will be registered with these agencies. You can check what is registered to you for free: Check more at Bisnode:

https://www.bisnode.no/kontakt/kundeservice-privat/gjenpartsbrev/

or Experian:

https://www.minexperian.no/#

Here you can see if there are any payment notes registered in your name. For example, conciliation council judgments, deductions from wages or that a creditor has taken a lien on a car or property.

But the list is by no means exhaustive. So it is not complete. You may have many debt collection cases that have not given you a payment notice. Yet. And you may owe money in the east and west that has not been collected. Not yet.

Check the tax return: An overview of loans can be found in the latest tax return. However, remember that these are old numbers. The latest tax report shows your finances as of 31/12/2021. In March this year, the figures were therefore already three months out of date.

What about the State? To get an overview of public demands, you should contact the Statens Innkrevingssentral (SI). You can log in and get an overview of your cases at SI with, for example, Bank ID here: https:// www.sismo.no/no/pub/tjenester/dinside

They have an overview of unpaid fines, NRK licences, defaulted student loans etc. Also call the tax office in the municipality you live in, as well as where you have lived previously, to find out about any tax claims, unpaid municipal fees, track garden fees etc.

Include the debt collection cases: So what about all the cases the Debt Register does not show? Those who have not given you payment notices. Yet. Because a full overview of debt collection is worse to obtain. There are over 100 different companies in Norway. If subsidiaries etc. are included, the figure quickly rises to 300! Many of these companies have a My Page function, where you can log in with your Bank ID and get your things. But not all. Therefore, you probably have to supplement with a telephone. And time. To simplify this process, I and my colleague in Luksusfellen, Lene Drange, have established the Debt Collection Register, to help people with such an overview for free - in a much shorter time!

Now you have the overview!

Now set up a list of all loans and credits you have, including private loans . In the first column, you enter the so-called principal, that is, what you originally owed. You should then include interest, fees and other costs, before entering the total on the far right.

Now you can take step 2**.**

STEP 2

Increase the mortgage: Do you own your own home? Then there may be opportunities here. Because the cheapest is usually to extend the existing mortgage. It is actually possible that the value of your home has increased so much that you can increase the loan without compromising security and the interest rate. Does the bank say no? Apply for a Startlån from Husbanken via your municipality. The most common is that the Startlånet is given in connection with the purchase of a home, but it has also been given when cleaning up one's own finances. But then you must have the necessary security in your own home anyway.

Collect small loans?: Do you not own a home, or does the bank not want to increase the mortgage? Many refinance old debts with a new, unsecured loan. Then you redeem expensive small loans, credit cards and debt collection cases with the new loan. In this way, you clear away tens of old cases and only have to deal with one move per month. In addition, a new loan can enable you to bargain down the price of the old debt collection cases.

The starting point is that you must pay what you owe, and the debt collection companies are of course under no obligation to ease the demands. However, most will give some discount on late interest and fees, if you can pay off the balance within a couple of weeks. However, it is very important that you clear ALL matters with the new loan. And not least that you tighten your own personal finances so that you don't end up in the same predicament again. The trap with this solution is that in a few months you stumble upon old, undiscovered cases, which then go to salary deductions. You then default on the new loan due to low liquidity. That means you don't have enough money. The new bank does not want to hear about interest exemption or restructuring at all, and sends the entire loan to the bailiff. And then the round dance has begun again. This is what my colleague Lene Drange calls the 'Refinancing trap'.

Repayment plan: The alternative is usually to pay off each individual collection case and consumer loan. The advantage of such a repayment plan is that you may only have to pay late interest, which is currently at 8%, which is somewhat cheaper than a new, larger unsecured loan. The disadvantage is that you then have to agree a monthly sum for each individual creditor and make sure that tens of agreements are complied with each month. Far from impossible, but for many who are in a debt crisis, the task becomes too extensive and complicated.

Cut in half: It is perfectly fine to have a credit card if you are financially 'healthy' ». If you start pushing credit card debt, cut it in half. Done talking. Force yourself to live on what you are paid in wages. The big problem is that people finance expensive loans with new, expensive loans.

Credit blocking: Do you have difficulty saying no when the salesperson in the store entices you to pay off expensive purchases? Then it may be a good idea to set up a voluntary credit freeze. This is a block that can be lifted by yourself, at any time, but since it's a bit of a cumbersome process to lift it, it will prevent stupid impulse purchases. It is free to block yourself from credit, and you can do it online, for example via https://soliditet.no/privatpersonner/ auth

Sale block: Do you have problems saying no to 'good' offers? Nothing wrong with cod capsules and children's book clubs, but if you are a person with poor financial management, you are also more likely to repeatedly forget to cancel the package.

Solution: You can easily block telemarketers by to enter your national ID number at the state Brønnøysund registers at: Reservation against telephone sales and targeted advertising

Free advice! NAV has a central economic advice telephone on 55 55 33 39. You can also find good information here :

https://www.finansnorge.no/verktoy/okonomi–og- debt advice/

If you need more in-depth advice, you can call your municipality and arrange a meeting with a financial adviser. All municipalities must have this offer, which is free. They can help with:

Get an overview of the debt
Calculate your serviceability
Negotiate with creditors about extrajudicial arrangements
Lay facilitate refinancing or
Prepare an application for a debt arrangement.

The disadvantage is that the waiting time to get an appointment can be several months, not to mention the processing time.

Private help: If the municipality or the bank cannot help you, you can seek help from private advisers. But be skeptical of those who have just started, lack references or propose advance payment with a woolly negotiation agreement.

HALLGEIR'S REMEMBER LIST:

Prioritize bills from the state. The state is the last to relinquish its claim. And the interest charges are expensive.
Don't default on your mortgage! Make sure that there is money in the account when the installment amount is withdrawn.
If you are struggling in the short term: Ask for payment postponement or freedom of instalments.
Call the debt collection companies. Be polite. Tell them that you are working to raise the income, give them a repayment plan
Split bills: The vast majority of creditors, electricity companies etc. are fine with you splitting the bills over several months.
Can you sell something? Do you have to have both a car and a boat? By changing your spending pattern, you can bring in some cash and save on monthly expenses. Then you can get rid of the payment notes. At the same time, you show your creditors that you mean business. It can give you the goodwill you need.
Interest exemption: You can get an interest exemption from Lånekassen, among other things if you are going to further study, take your first service or have a long-term illness... But also if you have a very low income. The requirement is that you must have had continuous full-time work for at least twelve months.
Deferral of payment: You can postpone the installment amount in Lånekassen for up to 36 months. That makes the loan more expensive, but sometimes you don't have other options in a crisis period.