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Spain – Current Debt Advice

To elevate debt advice services in the EU, it is important to understand the current state of debt advice in European countries. It is necessary to create a base level of knowledge before it is possible to create and carry out initiatives to improve debt advice services on an EU level.

Therefore, we interviewed Professor Carlos Javier Zarco Pleguezuelos from Spain.

According to prof. Pleguezuelos, 38% of homes in Spain cannot cope with unexpected expenses that might occur. This surpasses the official EU level, which averages at 30 %. Additionally, the rate of unemployment is the highest within the EU. Nearly 45% of young people are unemployed. This is a huge concern in Spain, as this generation is expected to be the main carriers of the workforce in the future.

The current state of debt advice within Spain has until recently only been in the hands of the consumer associations. Only private initiatives have the competencies to offer debt advice services. 

Through an agreement with the consumer associations, lawyer societies, and the government it has become available for consumers to go to a consumer association to get help if they pay a fee. They can go to a lawyer to get free legal advice if they meet the requirements regarding low income.  The system in Spain does not offer free legal debt advice to citizens unless they have an income that is lower than 1000 euros per month.

However, the political climate within Spain is not pushing for any changes within this area of debt advice. Political parties do not view this as a societal issue. Regional governments are not taking action, except for the Catalonia region which has had a great experience. The political landscape is therefore very difficult – they simply cannot agree on the circumstances and actions needed.

The solution needed is to exchange and examine the initiatives in Catalonia. The cooperation between the private and the government is the best solution. This will give the right amount of specialized legal debt advice. The authorities need to make contact with private entities, so the best debt advice can be provided.