Over 10,000 Icelandic Households Face Debt Problems Skip to content

Over 10,000 Icelandic Households Face Debt Problems

According to the conclusions of a task force of specialists, approximately 10,700 households in Iceland face problems due to mortgages. The task force calculated the impact of various methods towards solving these problems.


From central Reykjavík. Photo by Páll Stefánsson.

“These are very interesting conclusions; now we have to work through them,” Prime Minister Jóhanna Sigurdardóttir told Fréttabladid.

“Nothing is off the table,” she added. A consultative meeting with representatives of financial institutions and other parties of interest will be held today to discuss the task force’s conclusions.

The PM said it is clear that a large group of people suffer debt problems, some of which are so severe that actions can hardly be taken to prevent them from losing their homes. That might apply to 3,000-5,000 people. That group must be assisted through the means of the social system and with a buy-rental system so they won’t have to move.

Sigmundur Davíd Gunnlaugsson, chairman of the Progressive Party, said he is disappointed by the task force’s conclusions.

He pointed out that it doesn’t take the cost which is created if people aren’t assisted in tackling their debts into consideration. It seems to be the assumption that all debts can be collected in full, which is unrealistic.

Gunnlaugsson added he is of the opinion that an overall reduction of mortgages is the best way to assist indebted homeowners but additional measures are required to assist those who still face problems after the reduction has taken place.

One of the task force’s members, chairman of the Interest Association of Households Marinó G. Njálsson, is planning to issue a special report which will include information not included in the task force’s report, reasoning that the problem is more severe than indicated.

“If anything, the conclusion has affirmed my view that a flat reduction is the best way,” Njálsson commented. He said the overall effects of such a procedure must be looked at, not only the effect on those who are in the worst position.

Click here to read more about the debt problems of households and related stories.

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