High debts after a setback? What to do when you can no longer make ends meet
Illness, job loss, a divorce or a sky-high energy bill: sometimes you end up in financial trouble through no fault of your own. These are the steps that help, and this is how crowdfunding can play a part.
An unexpectedly high energy bill. Losing your job. Falling ill for a long time and earning less as a result. A divorce that suddenly leaves you carrying all the costs alone. It can happen surprisingly fast.
At first you still manage to push a bill back by a month. Then a second arrear is added. After that come reminders, collection costs and new bills that also need to be paid.
Before you know it, a temporary financial setback has grown into a problem that is hard to get out of on your own.
Debts are by no means always caused by someone handling money irresponsibly. Sometimes your financial situation changes because of circumstances you have little or no influence over.
Fortunately, there are several ways to get help. From a payment plan and support from your municipality to professional debt assistance. And in some situations, a crowdfunding campaign through Steunactie can also help to clear a specific financial arrear or create some breathing space again. The help and schemes in this article relate to the situation in the Netherlands.
Financial problems can happen to anyone
Many people associate debt with someone who structurally spends more than comes in. In reality, one major event can be enough to upset a financial balance.
Suppose you get by exactly every month and then receive an energy bill that is hundreds of euros higher than expected. Or you fall ill and temporarily receive less income. Perhaps your employment contract ends and you do not find new work straight away.
A divorce can also have major financial consequences. One household suddenly becomes two. A new home may need to be found, a deposit paid and basic furnishings bought all over again.
Other situations in which financial problems can arise include:
- the death of a partner, causing an income to disappear
- suddenly losing an important client as a self-employed person
- being able to work less for a long time because of illness or caring for someone
- an unexpected repayment claim or high bill
- necessary moving costs without a financial buffer
- a car that breaks down while you need it to get to work
- high healthcare costs or costs for necessary aids
- damage to your home that is not fully covered
- rent arrears after a few months of lower income
- several smaller setbacks in quick succession
The problem is often not just the original bill. As soon as payments fall behind, extra costs can turn a relatively manageable shortfall into a growing one.
1Do not wait until your debts grow further
One of the most important things you can do when you have money problems is to seek help early.
That can feel difficult. Especially if you have always been used to managing your own finances. Yet financial problems rarely become easier by putting them off.
Are you struggling to pay your energy bill, rent, health insurance or other fixed costs? Then contact the organisation concerned as soon as possible and ask what options there are for a payment plan.
Sometimes a payment plan alone can prevent one unexpected bill from growing into a much larger debt.
2Ask your municipality for help
If your debts are growing or you are losing track, you can turn to your municipality for debt assistance.
The municipality can look at your entire financial situation and decide what help is appropriate. That might be advice, debt mediation or a debt restructuring loan.
With a debt restructuring loan (saneringskrediet), various debts are paid off and you end up with one single debt to the lender or municipality. If a voluntary debt settlement does not work, a statutory procedure under the Debt Restructuring (Natural Persons) Act, the Wsnp, may follow in some situations.
Urgent problems
Are you facing eviction or the disconnection of gas, water or electricity? Then contact your municipality as soon as possible. With large or structural debts, professional debt assistance is often much more important than just trying to raise money.
3Check which schemes you may be entitled to
Before you borrow money or start a crowdfunding campaign, it is wise to check whether there are schemes you can use. On a low income, depending on your situation, you may for example be entitled to:
- general social assistance (algemene bijstand)
- special assistance (bijzondere bijstand)
- an individual income supplement
- housing benefit (huurtoeslag)
- healthcare benefit (zorgtoeslag)
- exemption from municipal taxes
- local schemes for people on a low income
Special assistance is intended for necessary exceptional costs that you cannot pay yourself because of your personal circumstances. Think, for example, of necessary moving costs or other exceptional expenses.
Always check with your own municipality first which schemes are available and what conditions apply.
4Help with an unexpectedly high energy bill
A high energy bill is a good example of a financial setback that can unexpectedly get someone into trouble.
If you cannot pay your energy bill, first look at the options with your energy supplier and your municipality. A payment plan may be possible, or there may be local schemes for households with financial problems. Energy advice can also help to lower future costs.
If a specific shortfall still remains after that, crowdfunding may be an additional option.
5Getting an overview first can already help enormously
Sometimes the problem is not only that there is too little money. You simply no longer know which bill to pay first, which letters are important or exactly how much debt is outstanding. You can get help with that too.
Geldfit
Helps you gain insight into your financial situation and decide which next steps are possible. Go to geldfit.nl (in Dutch)
Humanitas Thuisadministratie
Helps with organising your paperwork, getting a clear view of income and expenses, and contact with organisations. Go to humanitas.nl (in Dutch)
So you do not have to wait until a financial problem has become so big that a formal debt procedure is needed.
When can crowdfunding help with financial problems?
Crowdfunding can be particularly useful when there is a specific and clearly defined financial problem.
Suppose someone has received less income for three months because of illness and has built up rent arrears of €3,500 as a result. Or someone has finally found a home after a sudden divorce, but has no money for the deposit, a bed and other essentials. Perhaps a temporary financial shortfall has arisen after the death of a partner, until insurance, benefits and other matters have been arranged.
In situations like these, family, friends, colleagues and the wider community can work together to make one specific problem smaller.
Crowdfunding is then not necessarily the complete solution to someone's financial situation. But it can provide just the breathing space needed to move forward again.
Crowdfunding is no replacement for debt assistance
That distinction matters.
Does someone owe tens of thousands of euros to various creditors, and is there structurally too little income every month to pay all fixed costs? Then the problem is usually not solved by raising money once. Professional help remains necessary.
Crowdfunding can help with
- a specific, clearly defined shortfall
- rent arrears after a period of lower income
- a deposit and basic furnishings after a divorce
- a temporary shortfall after the death of a partner
Debt assistance is needed for
- tens of thousands of euros owed to various creditors
- structurally too little income for fixed costs
- debts you have lost track of
A crowdfunding campaign can possibly be used alongside such a procedure, but discuss this with the debt counsellor beforehand.
For example, when within a larger debt procedure there is one acute payment arrear that could have serious consequences. Think of an impending eviction or a necessary expense for which there is no room in the existing budget.
Raising money for someone else with debts
Not everyone with financial problems will quickly start a crowdfunding campaign themselves. Debt can come with shame. On top of that, dealing with creditors, paperwork, work, family and all kinds of other obligations takes a lot of energy.
Sometimes someone close to them sees sooner that help is needed. That is why you can also discuss with someone whether family, friends or colleagues could organise a fundraiser.
Always do this in consultation with the person you are raising money for. Financial problems are personal, and not everyone wants their situation made public.
The aim is to help someone, not to put their entire financial history online.
Be very specific about what you are raising money for
With crowdfunding for financial problems, transparency is extra important. "Help me pay off my debts" tells a potential donor very little. A specific story makes it much clearer what is going on. For example:
Rent arrears due to illness
Because of long-term illness, our family's income has temporarily dropped sharply. As a result, rent arrears of €4,200 have built up. With this fundraiser we want to prevent the arrears from growing further and the family from losing their home.
Starting over after a divorce
After an unexpected divorce, Sandra has finally found a new home. However, she does not have enough money for the deposit and basic furnishings. We are raising €3,500 so that she and her children can start again.
A high energy bill
Because of an unexpected loss of income, Mark could not pay his high final energy bill. He has since agreed a payment plan with the supplier. With this fundraiser we want to raise €2,000 to reduce the arrears and prevent further problems.
This shows what happened, what amount is needed and which specific problem the proceeds will solve.
You do not have to make everything public
Transparency does not mean putting every bank statement, medical document or detail of someone's private life online.
You can, for example, explain that someone could temporarily not work because of illness without making their full medical history public. The same goes for a divorce, dismissal or other personal event.
Share enough to make clear why help is needed, but protect the privacy of the person concerned at the same time.
A fundraiser can also be part of a bigger plan
The strongest crowdfunding campaign does not have to say:
"If we raise this amount, all financial problems will be gone."
It can actually build trust when it becomes clear that several steps are being taken. For example:
Alongside help from the municipality
The municipality is now helping to sort out the debts. With this fundraiser we want to prevent the rent arrears from growing in the meantime.
Alongside a payment plan
A payment plan has now been agreed with the energy supplier. We are raising money to be able to pay the first large instalment.
That makes crowdfunding part of the solution, rather than the only solution.
Take care if you receive benefits
Do you receive benefits or other income-related support? Then check, before you start a crowdfunding campaign, what donations received could mean for your situation.
Watch out
A large crowdfunding campaign can affect benefits, allowances or an ongoing debt assistance procedure. So discuss this beforehand with your municipality, debt counsellor or other organisation involved, especially if you want to raise a substantial amount.
And what about gift tax?
Tax can also play a role in crowdfunding. Donations can be regarded as gifts for tax purposes. Whether gift tax is due depends, among other things, on the amount and the relationship between giver and recipient.
With crowdfunding it is therefore wise to keep good records of donations. If in doubt, always check the current rules of the Dutch Tax Administration (in Dutch) or ask an expert for advice.
How do you start a fundraiser for financial help?
Do not start by publishing straight away. First map out together what is actually needed.
What happened? What other help has already been requested? Which payment plans are possible? What amount remains after that? And which specific problem do you want to solve with the crowdfunding?
Then you can create a fundraiser on Steunactie in which you calmly and honestly explain:
Who needs help
What happened
Why the financial problem arose
How much money is needed
What the proceeds will be used for
Then share the fundraiser first with people who know the situation. Family, friends, colleagues and others involved often form the first network around a fundraiser.
Updates can then show which steps have been taken and what the contributions have made possible. You will find more practical advice in 10 tips for a successful fundraiser.
Small contributions can mean a lot together
A debt of a few thousand euros can feel insurmountable for one person. For a group of people, the same amount can suddenly become much more achievable.
That is the power of crowdfunding. Not everyone has to be able to spare a large amount to solve a specific financial problem together.
See current fundraisers for financial help
Alles wat ik heb staat op het spel
Ik dacht dat dit mij nooit zou overkomen – maar toch gebeurde het. Door oplichting en ziekte dreig ik mijn huis te verliezen.
Sauvons les Olivettes
Urgence: pour sauvez le Piano-Bar "Les Olivettes", institution Liégeoise
Do you know someone who is stuck financially?
Sometimes help is not just about giving money. You can also open the paperwork together. Help apply for a payment plan. Go along to the municipality. Check which schemes are available. Get in touch with Geldfit or Humanitas.
And if a specific amount is still needed after that, you can discuss whether crowdfunding would be a suitable addition.
It is precisely the combination of practical help, professional support and support from someone's own circle that can give them a new perspective.
Start a fundraiser for financial help
Calmly explain what happened and what amount is needed, and let family, friends and colleagues help together.
Start a fundraiserHelp with debts and creating financial breathing space together
Financial problems do not have to be the result of wrong choices. Illness, dismissal, divorce, a high energy bill or another unexpected event can be enough to throw someone off balance financially.
The most important thing is not to wait too long.
Find out which payment plans are possible. Check which provisions and allowances you can apply for. With larger debts, ask your municipality for help, and look for support if you have lost track.
And is there still a clear financial shortfall after that? Then a crowdfunding campaign through Steunactie can help to get family, friends, colleagues and others involved moving together. Not as a replacement for professional help. But as an extra way to give someone who is stuck financially some breathing space again.
Steunactie Editorial
We write about giving, crowdfunding and how donation platforms work, so that you can make an informed choice about how and to whom you give.
