In Portugal the discussion over the problem of over-indebtedness is of the public domain. Crucial to inform any policy initiative in this respect is the understanding of the main characteristics of the consumers in non-compliance with debts namely with respect to their consumption pattern, education, sector of activity, etc, in addition to the identification of lenders main characteristics.

The present paper is a first attempt to investigate the determinants of over-indebtedness and identify the methodological questions that arise in this type of field surveys centered on the household. The results show that the most important factors that should be considered in analyzing over-indebtedness are: sector of activity of the head of the householder; financial charges ratio over the household revenue; consumption expenses value; estimative of the financial needs of the household; and household employment composition.
These findings are particularly important for policy purposes. First, they reveal the relevance of conducting field studies on a smaller geographical scale such as municipalities as we identified some determinants of over-indebtedness have a regional character. Second, the significance of the households’ perceptions regarding their financial situation demonstrates the urgency of implementing policies to increase households’ literacy level.