Rethinking Household Debt Relief: Should Swedes Be More Forgiving?

SHoF hosted a panel discussion on Tuesday, September 24, 08:00-09:15 to discuss economic theories and practical experiences related to household debt relief, both within Sweden and internationally.

Over the past year, the total unpaid debt registered with the Swedish Enforcement Authority (Kronofogden) has surged by 17 percent, reaching 119 billion kronor. Furthermore, the number of indebted individuals has increased by 6 percent across all age groups and regions in Sweden, marking the largest rise since the 1990s.

In comparison to countries such as the US, the UK, and the Netherlands, obtaining debt relief in Sweden is notably more challenging. Swedish policy mandates full recourse, meaning that unpaid debt is in principle never forgiven. Although debt restructuring is available, it is granted to about 11,000 individuals annually - approximately 2 percent of all Swedes registered with Kronofogden.

Participants join us to gain a deeper understanding of the costs and benefits of debt relief and to engage in a critical discussion on whether Swedes should adopt a more forgiving approach to household debt.

Academic Introduction by Professor Neale Mahoney, who will present insights from a recent study with findings on the Effects of Medical Debt Relief in USA.

Some of the questions that was discussed:

  • How big a problem is overindebtness in Sweden, for the individual and society?
  • What do we know about how consumers end up in financial distress, and its consequences for the individual, and society?
  • Are Kronofogdens services too cheap to prevent overindebtedness?
  • Is five year debt reconstruction too long? Is five year memory of debt reconstruction too long?
  • Do we want to, and if so how can we improve accessibility to debt relief for the long term financially distressed?

Speakers:

  • Johan Almenberg, State Secretary to the Minister for Financial Markets 
  • Neale Mahoney, Professor of Economics at Stanford University 
  • Lena Petersson, SVT journalist and author of the book Skuldsatt 
  • Fredrik Rosengren, Director General, Enforcement Authority

The event was held in English and moderated by Marieke Bos, Associate Professor, and Deputy Director at SHoF.

 

Followed by an Academic workshop

Academic workshop

The workshop aims to harness economic insights that delve into the effects and underlying mechanisms of over-indebtedness and debt relief strategies, taking into account their institutional contexts. It will facilitate discussions on the impact of these elements on household behavior and examine their wider consequences for credit and labor markets, along with overall welfare.

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