Overdue Debts and Financial Exclusion

We examine the impact of overdue debts in small villages one Hungary’s most disadvantaged regions. find that a significant number debtors with permanently escape from debt collectors. Accordingly, our sample, reduce likelihood declared work by 14 percentage points on average. The lack alone reduces probability opening bank account 21 points, and further it 9 points. negative effect health is almost as large positive high school diploma. In addition, health-destroying extends not only to debtor but all members household. Therefore, create poverty trap mechanism exacerbating financial exclusion, hence resulting losses for both individual society. recommend paying more attention smoothing credit cycles resolving non-performing obligations.