Debt, poverty, and financial exclusion

Abstract

Over-indebtedness of impoverished households and its relevance to the social work profession have not received sufficient attention in the professional discourse. It is the intention of this article to put over-indebtedness on the professional agenda, to review the literature about it, and to present initial data from a study on over-indebtedness in Israel carried out with special attention to debtors' coping with their debts. The research was conducted as a door-to-door survey in a neighborhood with low socioeconomic characteristics and included questions about the nature of the debts, the strategies people use to cope with debts and the obstacles they face while doing so. Findings: The research findings indicate a severe debt problem among the participants. Out of 142 interviewees, 61% had debt that was overdue and 27% of them did not have an active bank account-a significant parameter of financial exclusion. Moreover, the proliferation of debts per household, and the high level of debt-to-income ratio also indicate high risk for financial exclusion. Notwithstanding, the findings indicate that most debtors made active efforts in order to close their debts, using two distinct strategies, namely: trying to reach a payment arrangement with the creditor or paying off the debt by increasing their financial resources. Most debtors used the first strategy, although it was found as the less successful one.

Social work, poverty, and child welfare interventions

“…This article seeks to make a significant contribution to a growing body of research interested in social work with people in poverty (Deka, 2012;Krumer-Nevo, 2016;Krumer-Nevo et al, 2016;Pelton, 2015;Gupta, 2017). The data we have presented reveal a complex picture of social work responses to poverty and deprivation.…”

“…For example, the "poverty-aware social work paradigm" developed by Krumer-Nevo (2016) offers theoretical advances through updated connection between social work and the developing body of poverty knowledge termed new welfare theorizing. Krumer-Nevo, Gorodzeisky, and Saar-Heiman (2016) have also reported on the problem of family debt for social work practice, arguing for increasing professional cognizance of debt management and the role indebtedness plays in families' lives. Participatory research has demonstrated the value of knowledge-exchange processes and learning from families with experience of poverty and child protection.…”

Gendered debt – a scoping study review of research on debt acquisition and management in single and couple households

“…Since the deregulation of the credit markets in the 1980s, the degree of households suffering from indebtedness has increased in most industrialised societies (Angel & Heitzmann, 2015;Betti, Dourmashkin, Rossi, & Yin, 2007). Circumstances traditionally connected to poverty, such as low income levels, unemployment and poor health, are usually identified as factors that increase the risk for households to develop severe debt burdens (Caputo, 2012;Krumer-Nevo, Gorodzeisky, & Saar-Heiman, 2017;Patel, Balmer, & Pleasence, 2012;Russell, Maître, & Whelan, 2013). Increased levels of household indebtedness have also been linked to the recent decade's austerity-driven changes in social policy, where cutbacks of public programmes have given room for loans and credit as welfare-complementary components, thereby promoting a 'credit-based welfare' (Mertens, 2017).…”

Awaiting absolution – self-presentations in letters of application for debt reconstruction

“…Ryan 2009). However, although questions concerning indebtedness and overindebtedness are interwoven with many social work tasks, social work research on the subject is not extensive (Krumer-Nevo, Gorodzeisky, and Saar-Heiman 2016). International research on indebtedness is fragmented between different academic disciplines such as law, sociology and economics, and covers areas such as comparative consumer bankruptcy law (see e.g.…”