Latvians Struggle with Debt in a Recession

Latvians struggle with debt
Feb 04, 2009, by Kate McIntosh at The Baltic Times

"Rising corporate debt levels in Latvia have hit businesses and individuals hard as the economy continues its downward spiral and it becomes more and more difficult for many to pay back their loans.

The situation has caused a chain reaction for individuals who are in turn suffering as a result of lost work hours and unpaid wages.

Loans with overdue payments reached 15 percent of the Latvian bank loan portfolio at the end of last year, growing 8.2 percentage points from late 2007, reported the Finance and Capital Market Commission (FKTK) financial watchdog.

As a result of escalating debt levels, many businesses and banks are turning to debt collection agencies in a bid to recoup losses."

Obviously, debit collection is not the solution in an economy currently suffering about 16% unemployment.