Debt load of Russians has reached a historical maximum

According to the estimates of the Bank of Russia, the share of loans with a high debt burden, received by Russians, reached 30%. The pandemic and lockdowns did not stop the flow of borrowed funds.

The level of payments on unsecured loans in January 2020 reached 9.8% (of total income) and 1.9% on mortgages.

‘In the second half of 2020, the debt burden continued to grow. Despite the fact that the Central Bank considers the situation as a whole stable and there are no depressing forecasts yet, the regulator supported the initiative to restrict the issuance of certain types of loans. In particular, we are talking about the refusal of a loan to clients with a high debt burden (80%, for example)’ - the CEO of ‘Center for Assistance to Credit Debtors’ LLC Alexander Dokukin commented on the situation.

The bill has already passed the first reading and, according to experts, may be adopted this fall.

The new law will probably solve the problem of Russians' debt burden, but most likely, only partially. The risk of falling into a debt trap remains high.

‘People take loans in order to pay for housing and public utility services, to cover one loan with another. Among our clients, there are a lot of those who took funds to pay for treatment, building a house, and renovating apartments. In simple words, people take loans for their living,’ added Dokukin.

‘So, it turns out that the only way to get rid of existing debts is bankruptcy’, emphasized the speaker.

Let us remind our readers that according to the law 127-FZ ‘On insolvency (bankruptcy)’; Russians can use their legal right and write the debts off. However, everything is not so simple here - the bankruptcy of individuals has a lot of negative consequences.