Household debt has increased significantly since the second half of the 20th century, making it one of the cornerstones of household finances. It is, however, necessary to monitor that indebtedness does not spiral out of control, as it can have negative consequences both at the micro and macro level. We propose new measures of over-indebtedness based on the poverty framework, while also taking into account asset leverage. We illustrate these measures for the case study of Belgium, using data from the Eurosystem Household Finance and Consumption Survey. While the level of over-indebtedness is relatively similar to other commonly used indicators, we show that our indicators have some important advantages. They are able to capture different socio-demographic groups with a high risk of over-indebtedness and they also point towards the important role of non-mortgage debt and low resources (income and assets) rather than high levels of debt as such.
