Poles’ Debt Soars: The Growing Problem of the Debt Spiral

• Data from ERIF BIG indicates that the number of Poles with at least 3 unpaid debts increased by 114% year-on-year in the second quarter of this year and is twice as large as in the same period last year.
• During the same period, the value of unpaid liabilities also increased from PLN 28.7 billion to over PLN 30.4 billion.
• It is easier to fall into a debt trap during periods of the year characterized by increased spending, such as before holidays and the start of the school year.
• The average debtor is a working-age male. The highest number of indebted individuals resides in the Silesian, Lower Silesian, and Masovian provinces.

Poles are borrowing more and more frequently encountering difficulties in repaying their debts. According to data from the ERIF Economic Information Bureau, at the end of the second quarter of this year, there was more than a twofold increase in the number of people with 3 or more debts to repay. This may suggest that consumers are taking out additional loans to cover previous obligations they cannot afford to repay.

– The mechanism of falling into a debt spiral is well-known, but in a difficult situation, people often cannot prevent it. Such a situation may arise from life difficulties, such as illness or job loss, while current needs are met through loans due to a lack of funds. If shortages in the household budget persist for an extended period, consumers eventually cannot bear the increasing amounts related to their debt, and to cover them, they take out more loans. The number of people with at least 3 unpaid debts in the ERIF database increased by 114% year-on-year in the second half of the year. Therefore, we can conclude that the debt spiral among Poles is growing to alarming proportions – says Katarzyna Skrzypczyńska, ERIF BIG expert.

More debts are going to debt collection

Another indicator of the growing debt spiral among Poles is the number of secondary debts, those sold to companies specializing in debt recovery. At the end of the second quarter of this year, secondary debts increased by nearly 46% compared to the same period last year. The number of debts not sold to debt collection companies also increased significantly, by as much as 64%. An analysis of the ERIF database shows that the total value of debts—both secondary and those collected by creditors themselves—amounted to over PLN 30.4 billion at the end of the second quarter of 2024. In the same period last year, it was over PLN 28.7 billion.

– Overall consumer debt is rising. The causes may include increasing costs of living and basic needs, as well as insufficient financial education combined with the ease of obtaining additional financing or deferred payments for purchases. Special periods of the year, such as holidays or the start of the school year, which are times of increased shopping, must also be considered. It is particularly important to be cautious during these times to avoid falling into a debt trap. Statistics show that men, especially those with more child support debts, are more likely to become indebted – analyzes Katarzyna Skrzypczyńska.

Who is the average debtor?

The average debtor is a working-age male, as confirmed by ERIF BIG demographic data—men are the most indebted in nearly all age groups from 18 to 64 years old. They account for 61.5% to 65.5% of all debtors. The share of women in this age range is 34.5% to 38.5%. The situation balances out somewhat in the 65+ age group, where the share of indebted women and men is almost equal. However, women over 55 have the largest debts—nearly PLN 7,000. The least indebted are the youngest women aged 18-24, with debts of just under PLN 3,000.

The highest number of debtors lives in the Silesian province—177,099 people, slightly fewer in the Masovian province—165,486, and the Lower Silesian province—138,386. On the other hand, the fewest debtors live in the Opole province—28,501 people, the Podlaskie province—29,713, and the Świętokrzyskie province—33,130.

– In every province, the most common cause of debt is unpaid bills for telecommunications services, such as phone, internet, etc. This shows that Poles are unable to pay their basic obligations. If loans to cover previous debts and for consumer goods are added to this, it can lead to a very dangerous situation, which is falling into a debt spiral – warns the ERIF BIG expert.

Getting out of the debt trap is a difficult process that takes years. It requires good preparation and knowledge of one’s financial situation. Many debtors do not know how much they owe and to whom because long-overdue debts are sold to debt collection companies. The state of one’s debt can be easily checked with an economic information bureau. This is the starting point for a conversation with the creditor.