Municipal Credit Bank for budget management and debt assistance

The municipal credit bank (GKB) is a financial body established by the government, intended to help people with debts. This is done, among other things, through budget management and social lending. They help solve financial problems that people can no longer overcome on their own. The number of people who have their money managed by the Municipal Credit Bank (GKB) is considerable. In 2019, the Netherlands had more than half a million households with problematic debts. These averaged 40,000. Asking for help with debts is a big step for many. People are often ashamed of it. It is true that debt assistance from the Municipal Credit Bank is not free for someone who is already struggling, but for many people it is very reassuring that they will not fall into debt again.

Contents

  • What kind of bank is the Municipal Credit Bank (GKB)?
  • Providing social loans is less of a priority
  • What can the Municipal Credit Bank do for people with debts?
  • What does budget management by the Municipal Credit Bank cost?
  • Who uses the Municipal Credit Bank?
  • Which debts are eligible for budget management?
  • How does the Kredietbank’s budget management work?

What kind of bank is the Municipal Credit Bank (GKB)?

The Municipal Credit Bank, GKB for short, is not an ordinary bank but an institution for debt assistance. They help people with financial problems who can no longer solve them on their own. To this end, people have often joined forces in municipal partnerships. And credit banks also work together with other aid agencies, such as:

  • the municipal social services;
  • and social work.

Providing social loans is less of a priority

Where the emphasis used to be on providing social loans, nowadays the emphasis is more on preventing debts and solving debts.

What can the Municipal Credit Bank do for people with debts?

As a rule, the emphasis is on support in the form of budget management, but the range of tasks usually also includes:

  • making payment arrangements with creditors;
  • lending to a limited extent and under strict conditions;
  • protective order;
  • budget coaching;
  • debt prevention;
  • providing information.

Credit banks are generally affiliated with the NVVK, a trade organization for debt assistance and a trade association of professional administrators. They act according to specific codes of conduct, which guarantees expert help.

What does budget management by the Municipal Credit Bank cost?

The Kredietbank’s services are not free, but if you compare the costs with overdrafts, loan debts and other costs, it is generally much cheaper. And in some cases the costs are reimbursed from special assistance.

Who uses the Municipal Credit Bank?

Due to the persistence of the financial crisis, a shift in monetary needs is also observed. While in the past the majority of customers received social assistance benefits, nowadays an increasing number of people turn to the Kredietbank with a regular income and their own home. People often get into trouble because of things like:

  • divorce;
  • loss of job;
  • or unexpected financial setbacks.

Although many Kredietbank customers have run into financial problems through no fault of their own (unemployment, housing crisis, etc.), there are also people with the proverbial hole in their hand, people who are victims of their own purchasing lust. These people also resort to the Kredietbank. They often want to remain customers, even after their debts have been resolved; The fear of relapse is very great.

Which debts are eligible for budget management?

Although this is of course not an exhaustive list, problematic debts include:

  • arrears in payment of fixed costs such as rent, energy costs and health insurance premiums;
  • an overdraft at the bank;
  • outstanding traffic fines;
  • loan debts;
  • debts in connection with installment purchases.

How does the Kredietbank’s budget management work?

Budget management by Kredietbank is actually based on three pillars:

  • the bank manages the money of those involved;
  • all fixed costs are paid from this monthly;
  • Those involved receive living allowance from the bank every week.

Some people have been in the Kredietbank’s customer base for years, but ultimately the intention is that those involved will be able to handle their financial affairs themselves again after a while. Because those who have their finances in order live a lot more peacefully and also function better in society.