The Consequences of Over-Indebtedness and its Effect on Individual Well-Being

Nur Hafidzah Idris, Nur Syuhada Muhammad, Norraeffa Taib, Nor Shahrina Mohd Rafien and Nor Hamiza Mohd Noor
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Nur Hafidzah Idris: UiTM Melaka, Kampus Bandaraya Melaka, Malaysia
Nur Syuhada Muhammad: UiTM Melaka, Kampus Bandaraya Melaka, Malaysia
Norraeffa Taib: UiTM Melaka, Kampus Bandaraya Melaka, Malaysia
Nor Shahrina Mohd Rafien: UiTM Melaka, Kampus Bandaraya Melaka, Malaysia
Nor Hamiza Mohd Noor: UiTM Melaka, Kampus Bandaraya Melaka, Malaysia

International Journal of Research and Innovation in Social Science, 2024, vol. 8, issue 10, 2841-2849

Abstract: This study examines the methods used by over-indebted borrowers dealing with the issue of over-indebtedness and its effect on borrowers’ well-being. We identified three broad coping strategies that connected with their well-being: sacrifices for basic needs, economic sacrifice, and social and psychological sacrifice. By utilizing the online data collection technique, we identified that most over-indebted borrowers had to do extra work, deplete savings, and sell or pawn their assets to cope with the over-debt situation. Furthermore, the results also reveal that over-indebted borrowers are experiencing psychological distress in their marriages. Despite the difficulties faced by the over-indebted borrowers, they are not compromising on their children’s education, where the majority disagree with reducing education expenses for their children. The findings of this study opened a new dimension in understanding the impacts on borrowers and may contribute to helping policymakers formulate strategies and support systems to alleviate financial distress among borrowers, which could promote economic stability.

Date: 2024
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