Debt consultant: debts often cause families to fall apart

Yulle Palmas, a debt consultant at the day social center on Punane 48b in Tallinn, told Radio 4 about the most common reasons why people end up in debt. Loans are the leading cause, followed by fines issued by the police or the municipal police. Often debts arise because people do not pay bills on time; the case then goes to a bailiff, whose services add to the burden. Alimony payments are another frequent reason: they are not paid initially, and later the entire accumulated amount is collected at once.

According to Palmas, debt consultants try to find the most suitable and least painful solution, but this only works if the debtor genuinely wants to return to a normal life. She described a typical scenario: a person with a steady job, income, housing and a family impulsively takes out a quick loan without reading the terms. Later the same company offers another loan to repay the first one, which only tightens the debt trap.

A bailiff can seize not only a bank account but also all real property – an apartment, a summer house or land plots. The property is then sold at auction, but the proceeds are often not enough, so part of the debt remains unpaid.

Palmas stressed that debts very often lead to family breakdown, which in turn brings new financial obligations such as alimony. It may be hard to make ends meet, she said, but alimony is the legal right of the other parent. Losing a job due to health problems or an injury is another common hardship. Importantly, debtors do not lose their rights, and consultants – qualified lawyers – help explain and protect those rights.

Tallinn residents can use the service free of charge. On average, consultants hold about four sessions a day, and people can come back. For residents of other municipalities, a consultation costs 46 euros per hour, but local authorities often cover the expense.