In short: over-indebtedness is a situation in which a person persistently cannot cover their instalments and bills from income without sacrificing basic needs or taking new loans.
Simply put: early signs: paying only the card minimum month after month; instalments taking a large share of net income; borrowing to repay a loan; avoiding letters from lenders. Difficulties have many causes — illness, job loss, divorce — and are not a judgement of the person.
Example: net income €1,500, instalments €900 — 60 % of income. After food, housing and bills nothing is left for savings, and every unexpected cost leads to a new loan.
Watch out: the answer is not a new expensive loan. List all your debts, talk to lenders in writing and early, and seek free advice.
The EU rule: from 20.11.2026, Directive (EU) 2023/2225 requires creditors to detect difficulties early and refer consumers to independent debt advice services available with only limited charges (Article 36).
Example: Bulgaria — Consumer Credit Act, Article 32a: lenders must have rules for borrowers in difficulty, including early indicators, and consider restructuring measures.
Check in your country — Where is the official list of debt advice services? Start with Your Europe and the consumer protection authority.
Source: Directive (EU) 2023/2225 — https://eur-lex.europa.eu/eli/dir/2023/2225/oj; Pecuvo Module 23.