The difficulties of the remaining 1.8 million people in Latvia in settling the obligations caused by the state debt of 20.17 billion euros and the borrowing of 17.8 billion euros from banks is also evidenced by the fact that 7.06 billion euros were handed over to bailiffs for collection and 2.01 billion to extrajudicial debt collectors.
The Consumer Rights Protection Center (PTAC) took the initiative to explore the dynamics of debt collection and settlement. On June 15, the deputy director of PTAC’s Consumer Rights Monitoring Department, Andis Priedītis (pictured), presented a summary of reports for the year 2025 provided by companies that have received licenses for out-of-court debt collection.
In order to relieve the burden on the courts, since February 1, 2013, the Law on Extrajudicial Recovery of Debts has been used in Latvia. This law and the PTAC that monitors its compliance should prevent abuses disguised as debt collection. PTAC manages the smallest number of cases in which the payers are unable to settle their obligations without problems.
The population is shrinking, but the debt burden is growing
According to the calculations of the Central Statistics Office, Latvia has started the year 2026 with 1,845,096 inhabitants. The line of employment indicators in the CSB database so far ends with 892.4 thousand workers in December of last year. Thus, the number of people who make money or who participate in making money is divided almost half and half by motivating money earners (the main reason why employees with children are needed to maintain work discipline) and taking care of them, if only with good advice.
The payments necessary for both earning and spending money very often do not take place practically at the moment, as in the cases when a person takes a product from the shelf in a store and pays at the cash register. Employers do not pay employees at the end of the day for work during the day, while buyers of goods and services are given the opportunity to use the purchase first and pay later, although prepayment is also not a miracle. The lion’s court all these settlements are included in one month: counting of time can be started both from the 1st of the month and from any date from the beginning of the transaction to its end on the same date after the month, but the parties are not prevented from agreeing on other payment terms. It is only important that the parties acknowledge, respect and fulfill these deadlines.
Current transactions bear the burden of long-term liabilities. These transactions should be done with calculation so that money bounces off of them to settle the debts of the state, companies and households. The withdrawal of money from circulation to pay long-term debts is one of the reasons that disrupts current payments.
The people of Latvia have to take into account the fact that the country ended last year with a debt of 20.17 billion euros. The government must be able to collect enough money from taxpayers to defer interest payments on this debt. On the other hand, the purpose of paying interest is to borrow even more money, which the state puts into circulation, making current payments easier now, despite the threat that these payments will be more difficult in the future.
At the turn of the year, Latvian citizens’ and companies’ debts to local banks amounted to 8.4 and 9.4 billion euros, respectively.
PTAC stats vs LB stats
Almost the last twenty years, since the economic crisis of 2008, have been spent lamenting the fact that Latvian commercial banks have continuously reduced their loan portfolios. During this time, it seemed more than once that the increase in loan portfolios had already resumed, but immediately after, it turned out that the appearance of growth was caused by temporary fluctuations. On November 24 of last year, “Neatkarīgā” described an event organized by the Bank of Latvia (LB), for which the LB had organized the creators of banking activities in such a way that the president of the LB, Mārtiņš Kazāks, could say that “the increase in lending is close to 15% this year compared to the previous year, which means that lending has become a driving force for the economy, which pushes the economy forward, which gives opportunities to improve the quality of life of citizens and entrepreneurs to grow”.
In LB statistics, the increase in lending is still continuing, but now with a reflection also in the negative – debt statistics maintained by PTAC. A. Priedītis informed that in 2025, the total amount of newly initiated debt collection cases amounted to 230.5 million euros with an increase of 17.6% compared to 2024, according to how the increase in the amount of debts recognized by banks should be correctly expressed not in percentages, but in times: compared to 2024, the number of newly initiated debt collection cases increased 3.4 times, but the total amount – 5.4 times. It is much less frightening if the same increase is expressed in absolute numbers: an increase in the number of recovery cases from 5.5 to 18.6 thousand and an increase in the amount to be recovered from 17.9 to 96.2 million euros.
During the past year, the difference between the sums collected and those that came to be collected pushed the amount demanded by the banks over the border line of one billion euros, even to 1.002 billion euros; an increase of 86.9 million from 915.1 million. In such a comparison, the increase is not devastating, but a warning that the total amount of recovered money will not be large. It seems that the mass of irrecoverable debts is dragged from year to year in the direction not of recovery, but of write-off.
Until PTAC only those cases in which the banks no longer consider it possible to achieve debt repayment by shaming and improving creditors by giving them credit interest holidays, etc., come to notice and supervision. One should not be surprised by the conclusions about the deterioration of the quality of the banks’ credit portfolio. First of all, too little time has passed to draw definite conclusions. Second, the jump in drive volume in 2025 can be explained by the low base of comparison in 2024. However, concerns remain as to whether the state has forced banks to issue loans to actually insolvent customers. If so, then this is an argument in favor of the banks, why they almost avoided expanding the circle of borrowers. The state has now forced banks to issue loans by charging banks a tax on the difference by which the amount of deposits attracted by the bank exceeds the amount of loans.
