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The pandemic has made us better payers

Over the past six months in Norway, the amount of consumer debt subject to payment remarks has been reduced by NOK 1 billion. Norway has not experienced this sharp a decrease in payment remarks in a very long time. The change is linked to the fact that people are spending less, paying earlier than before and avoiding debt collection proceedings.

“We would probably have to go back more than 15 years to find a similar decrease. I can’t remember seeing anything like it. The number of payment remarks normally ‘always’ rises as a result of inflation and immigration, as well as steady growth in the number of people buying on credit, says Kredinor’s Chief Analyst Magnus Solstad.

The amount of money subject to payment remarks has fallen by over NOK 1 billion, from NOK 63.6 billion on 1 January this year to NOK 62.2 billion on 1 August, according to figures Dun & Bradstreet (formerly Bisnode) collated on behalf of Kredinor.

Fewer people with payment remarks during the pandemic

A claim may end in a payment remark if the amount due is not paid during the debt collection process and is therefore forwarded to the Execution and Enforcement Commissioner for legal enforcement. Approx. 230,000 people are subject to payment remarks in Norway. That is 10 per cent fewer than before the pandemic.

“I would first like to say that we share concerns for the most disadvantaged sections of society. However, it is encouraging that the number of people with payment remarks against them has decreased through the pandemic. So far, more than 26,000 people have found their way out of financial difficulties,” says Solstad

“There was a sharp increase in the number of payment remarks throughout the period until the pandemic put the brakes on private spending. It’s also important to note that there is a considerable lag in the figures. It takes more than six months from the time payment problems arise until a payment remark is recorded. So, it is only now that we are seeing the positive impact of new patterns of consumption during the pandemic,” says Solstad.

The most significant decrease during the year can be found in the 30–39 and 40–44 age groups.

“These age groups were previously conspicuous for their high spending and many payment remarks. Even those with good incomes often lived on credit, both at shopping centres and out on the town. The pandemic has put a significant damper on a great deal of impulse buying, which we are now seeing reflected in the figures,” says Solstad.

Better payers through the pandemic

Payment remarks are not the only indicator that people in Norway are using their money to pay off expensive debts. Throughout the pandemic, there has been a decrease in the amount of interest-bearing consumer debt. According to figures from the Norwegian Debt Register, this has fallen by around 14 per cent since March 2020.

“On the whole, the Covid-19 pandemic has led people to live more frugal lives. Those who remained employed have diverted more money than usual to paying off their debts. And people are paying faster. Experts previously forecast a deluge of bankruptcies and business insolvencies, and that people in Norway would be hit by a debt crisis. Now that we are on our way out of the pandemic, we can conclude that this has not happened,” says Solstad.

According to Kredinor’s Chief Analyst Magnus Solstad, the pandemic has led people to spend less, and more people are paying what they owe before debt collection proceedings are initiated. This has resulted in a reduction in the number of people with payment remarks against them

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