Frequently asked questions when choosing a debt counselling centre

Below, we answer the most common questions we are asked when indebted and over-indebted people are looking for a counselling centre.

What is the difference between debt counselling and insolvency counselling?
What do "state-recognised" or "recognised according to Section 305 InsO" mean?
Who offers free counselling?
What training do the counsellors have?
Is there a seal of quality or a certificate that recognises a good counselling centre?
Do you need to visit a counselling centre to get advice?
What if debt isn't the only problem?

For a long time, only the term "debt counselling" was used for counselling people with debt. The term "insolvency counselling" only came about when the Insolvency Code (InsO) came into force as law in 1999. Today, the distinction usually refers to the so-called state recognition as an insolvency counselling centre according to Section 305 of the Insolvency Code on the one hand and the debt counselling centre without state recognition on the other. This artificial separation between debtor counselling and insolvency counselling has grown historically and you are unlikely to meet them so clearly separated in reality:

• A good debt counselling centre will always consider the insolvency proceedings as one of many ways to settle your debts and will give you full information about this.
• Conversely, a good insolvency counselling centre will also inform you about regulatory options without insolvency proceedings and will not push you towards proceedings because hardly anyone is helped by "quick debt relief". 

In 1999, the German Insolvency Code (Insolvenzordnung, InsO) created the possibility of having debts judicially regulated under certain conditions and obtaining a discharge of residual debt. A prerequisite for opening insolvency proceedings is that you have previously tried to reach an out-of-court agreement (i.e., without the court) with your creditors.

Since insolvency law is very complicated in many places, the legislator has prescribed that a "suitable body" or a "suitable person" must have accompanied this attempt at agreement. When opening insolvency proceedings, it is therefore not you as the debtor who has to prove that you have tried to reach an agreement and that this attempt has failed, but this suitable body or person.

The individual federal states must determine who is recognised as "suitable" in accordance with Section 305 InsO. Conversely, this also means that the regulations on recognition may look different in each federal state. 

• To be recognised as an appropriate body, debtor and insolvency advisory bodies in many federal states must prove that they employ qualified personnel, have extensive experience and can provide legal advice.
• For example, lawyers, tax consultants, auditors are usually recognised as suitable persons. 

There are free counselling services for indebted and over-indebted people throughout Germany.

• State funding: Most counselling centres receive subsidies from the federal states or the cities and municipalities in which the counselling seekers live. Often, however, state funding alone is not enough to offer free counselling. In some federal states, therefore, seekers of advice with higher incomes have to make a small contribution of their own. In addition, the counselling centre providers almost always contribute their own funds. 
• Counselling and legal aid: Lawyers can invoice their services via counselling and legal aid, so that they remain free of charge for the person seeking advice. As a rule, those seeking advice must apply for counselling and legal aid themselves, but the law firm will be able to say exactly where and how (see also provider)
• Employers: Sometimes employers cover the cost of counselling or have their own debt counsellors for their employees. This is especially the case with large corporations and is part of social management. 
• Foundations: Some foundations offer support in the form of loans and grants to settle debts. The Marianne von Weizsäcker Foundation also supports former addicts free of charge in negotiations with creditors on debt settlement. Caution: The advice of the foundation is only given if a loan application is made beforehand via another counselling centre (e.g., addiction/drug counselling centres, therapy/aftercare facilities, probation officers, caregivers)
• Creditor financing: In rare cases, large creditors finance individual projects or counselling offers. Usually, the counselling centre then receives a fixed amount and refers to the sponsor in flyers and brochures. 

Caution: Especially on the Internet, some counselling centres entice by offering "immediate and quick" advice, a "free initial consultation" or a "free debt analysis". Such bait offers are often linked to expensive counselling contracts. Always find out the total cost of  counselling before signing a contract. 

Usually, the counsellors have completed their studies. In most federal states, this is a prerequisite for state recognition as a suitable insolvency counselling centre. In addition, the counsellors have subject-specific additional training. In addition to methodological and business fundamentals, such training includes the teaching of legal skills and knowledge of current specialist discussions. 

Conventionally, the field of work is divided into three different occupational groups: 

• one third trained social educators (m/f/d) and social workers (m/f/d)
• one third lawyers (m/f/d) 
• one third from commercial/business or administrative professions, e.g. from banking, ecotrophology or administration. Many sociologists (m/f/d) and economists (m/f/d) are also active in counselling.

The bad news first: Unfortunately, there is no uniform logo or labelling that can identify a reputable and high-quality counselling centre.

The term "debt counsellor" is not protected by law. This means that theoretically every person can call themselves that - whether they are professionally qualified. The good news is that with the principles of good debt counselling, there is a model that many counsellors feel committed to.

In addition, there are quality standards to which many counselling centres are committed. These are not uniform throughout Germany, but vary regionally. Basically: Quality standards are a common method for achieving comparable and high-quality services or products. Such standards are generally known, for example, in the import regulations of foodstuffs into the EU, there are clear requirements as to how long and heavy a cucumber must be to be sold in Germany. In the area of debt counselling and insolvency counselling, responsibility for quality assurance lies with the recognition authorities in the federal states, the welfare associations and the individual institutions. 

In some federal states, for example, state working groups ensure the quality of counselling: 

• Berlin: Quality seal for social debt counselling Berlin
• Schleswig-Holstein: Quality standards
• Thuringia: Quality standards

Further information can also be found in the Good counselling section.

The counselling sessions usually take place on the premises of the debt counselling centre. You can also take advantage of other offers, especially if you have limited mobility or the distance to the nearest counselling centre is very far: 

• In individual cases – and only after express appointment and approval – some debt counsellors also make home visits to people seeking counselling. Caution is advised when counsellors bring (partly fee-based) counselling contracts to your home for you to sign. Always read everything carefully and only sign what you have understood exactly and what you really agree with! 
• Some counselling centres also offer consultation hours in district centres or mobile counselling centres (e.g., a "counselling bus"). 
• Some counselling centres offer online counselling. Online counselling can be a helpful way to secure support anonymously and free of charge. 

It is best to ask about the possibilities offered by your competent counselling centre. 

On this page, you will also find a lot of further information about the counselling process. 

Financial worries are very stressful for body and soul in the long run. Not infrequently, they lead to illnesses and problems in the partnership and family. The specialists in the debtor and insolvency counselling centres are aware of the many effects of financial difficulties on all areas of life. The specialists have an open ear for your concerns and problems and can offer you further assistance if necessary.

• Some counselling centres work exclusively in the area of debtor and insolvency counselling (specialised counselling centres),
• others carry out the counselling as part of other focal points such as family, social, addiction or migration counselling (integrated counselling centre).

Almost all counselling centres are well networked on site and can establish necessary contacts with other counselling services if you wish.