Debt is a legal problem with legal solutions, not a verdict on your character.

The P-Konto

If creditors can reach your bank account, this is the first thing to do — and you can do it without advice, without a lawyer and without anyone's permission.

• What it is. A Pfändungsschutzkonto is your ordinary current account converted into a protected one. Below the protected amount, seizure simply cannot reach the money.
• How much is protected. From 1 July 2026, €1,587.40 per calendar month, automatically. It rises by €597.42 for the first person you support and a further €332.83 each for the second to fifth — but you must evidence those dependants with a certificate from a counselling office, employer, Familienkasse or Jobcenter.
• Your bank must convert it. It is a legal entitlement, it must happen within four business days, it must be free, and you may not be pushed onto a worse or costlier product. A bank that resists is simply wrong, and saying so usually settles it.
• One per person. You may hold only one P-Konto. Two is treated as abuse — convert an existing account rather than opening a new one.
• Do it before the seizure lands if you can see it coming. Converting afterwards still protects money going forward, but anything already taken is far harder to get back.

Money above the protected amount can be carried into the following month, so a one-off payment is not automatically lost. Kindergeld and certain one-off social payments carry additional protection on top. A counselling office will sort all of this in a single appointment — it is bread-and-butter work for them.

Free debt counselling

Professional, confidential and free at recognised offices — anerkannte Schuldnerberatungsstellen, run mostly by charities and local authorities.

The honest problem: the queue

A first appointment at a public office commonly takes six to nine months, and in some regions the wait reaches two years. That is not a reason to skip it — the process takes years anyway, so joining the queue today is worth more than a perfect plan next spring. But it does mean two things.

• Ask explicitly for an emergency appointment (Notfalltermin) if you face wage garnishment, an account seizure, eviction or a utility cut-off. Most offices hold slots for exactly this, and many offer telephone advice as well. Say the specific threat and the date out loud when you call: “I have a termination notice dated the 14th” moves you up a list that “I have debts” does not.
• Register everywhere at once. Put your name down at several offices — they do not share lists, and waits vary enormously between neighbouring towns. Caritas, Diakonie, AWO, the Rotes Kreuz and the municipal Schuldnerberatung are separate queues.

What to bring, and what it does

Bring everything, including the envelopes you have not opened. Nobody there will be shocked, and unopened post is the single most common thing counsellors see. They will list your creditors, check which debts are still legally enforceable at all, handle the P-Konto, negotiate with creditors on your behalf and, where it fits, prepare an insolvency application. Recognised offices are also the bodies legally entitled to issue the certificate an insolvency application requires.

Privatinsolvenz: debt-free in three years

The thing worth knowing, because most people picture something far worse than it is: consumer insolvency in Germany now takes three years, after which the remaining debt is written off.

• Three years, not six. For applications from 1 October 2020 onward, the Wohlverhaltensphase lasts three years, and Restschuldbefreiung follows. Whatever is left is gone.
• First an out-of-court attempt. You must try to settle with creditors first, and a recognised counselling office or lawyer certifies that this failed. That certificate is what lets you file — another reason to join the queue early.
• During the three years you hand over only the seizable part of your income. Below the protection thresholds, nothing is taken. You may keep working, and earning more is not punished by extending the period.
• Costs in a typical no-assets case run about €2,000–3,000. They can be deferred and repaid in instalments over up to 48 months after your debts are cleared — not up front.
• The SCHUFA entry is deleted six months after Restschuldbefreiung. This changed in 2023 and matters enormously: three and a half years after filing, you are both debt-free and credit-clean, able to rent and sign contracts normally.
• What it does not clear: fines, most debts from deliberate wrongdoing, and maintenance arrears deliberately unpaid. Student loans, consumer credit, overdrafts, unpaid rent and phone bills are all ordinary dischargeable debt.

The three years start when you file, not when you feel ready. People routinely spend longer than that avoiding the post.

Debt collectors and your actual rights

• An Inkasso letter is not a court order. It carries no legal force by itself. Nothing can be taken from you without a court title (Titel), which is a separate and visible process you would receive documents about.
• Demand an itemised breakdown. Collection agencies must state who the original creditor is, what the debt is for, and how their fees are calculated. Inflated collection costs are common and frequently reducible — the Verbraucherzentrale checks these routinely.
• Check whether it is time-barred. Most ordinary claims expire after three years, counted from the end of the year in which they arose. A time-barred debt can still be demanded, but not enforced — if you raise the objection. Never acknowledge or make a token payment on an old debt before checking: doing so can restart the clock.
• Never ignore a Mahnbescheid. A yellow official court document is different from a collection letter. You have two weeks to object, and the objection form comes with it. Missing that deadline is how disputed debts become enforceable ones.
• You may deal in writing only. If phone calls are distressing, say in writing that you require written contact — and keep copies of everything you send.

Money you may not be claiming

A large share of German benefits go unclaimed simply because people assume they do not qualify. Checking costs nothing.

• Wohngeld. A housing allowance for people in work as well as out of it. The rules were significantly widened in 2023 and many who were previously ineligible now are. Apply at the local Wohngeldstelle.
• Bürgergeld can top up low earnings, not only replace them — working full-time does not automatically disqualify you.
• Kinderzuschlag, for working parents on modest incomes, alongside Kindergeld.
• Rundfunkbeitrag exemption. If you receive Bürgergeld, Grundsicherung, BAföG or certain other benefits, you can be released from the licence fee — and arrears are a startlingly common contributor to debt spirals.
• Bildung und Teilhabe for school costs, meals and activities for children.
• Sozialtarife and hardship funds from energy suppliers, and instalment agreements which suppliers will usually accept rather than disconnect. Ask before the cut-off notice, not after.

Outside Germany

The part nobody writes down

Debt does something specific to people: it makes opening the post feel physically impossible, and then the unopened post becomes its own second problem. If that is where you are, you are not unusual and you are not beyond help — counsellors see it every single day, and there is a standard, unremarkable way through it.

Three things worth holding onto. Debt is almost always finite and legally resolvable, which distinguishes it from most sources of despair. Almost nobody in Germany goes to prison over consumer debt. And the three-year insolvency route means that even a genuinely hopeless-looking amount has a defined end date — one that is closer than the time most people spend not opening envelopes.

If the money is why you are thinking about ending your life, please treat that as an emergency in its own right rather than something to solve first: kantholz93.com/suicide. Creditors can wait. TelefonSeelsorge answers on 0800 111 0 111, free, anonymous, around the clock.