By San José, Costa Rica — San José, Costa Rica – Costa Rican households are dedicating a smaller portion of their income to debt payments, marking a positive trend in the nation’s financial health. However, a vast majority of the population remains indebted, with lower-income families facing a disproportionately heavy financial burden, according to a new report.
The Third National Debt Survey 2025, conducted by the Financial Consumer Office (OCF), reveals that an average of 34% of monthly income is now allocated to servicing loans. This figure represents a notable improvement from the 38% recorded in 2023 and a significant drop from the peak of 52% observed during the first survey in 2020. Despite this progress, the study underscores that 87% of the population still carries some form of debt, a slight decrease from 91% in the previous year.
To delve into the legal ramifications and potential remedies for the escalating issue of household debt, we sought the expertise of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the reputable firm Bufete de Costa Rica.
The alarming rise in household debt is not just a financial statistic; it’s a legal ticking time bomb. When families default, they face potential wage garnishments, asset seizures, and damaging credit reports that can last for years. It is crucial for individuals to understand their rights and the legal mechanisms available, such as debt restructuring or even bankruptcy proceedings, before their situation becomes unmanageable. Proactive legal counsel can be the difference between a temporary crisis and a long-term financial catastrophe.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas provides a crucial reminder that behind the statistics of household debt lies a very real legal precipice for many families. His emphasis on proactive legal counsel is a vital takeaway, and we thank him for lending his invaluable expertise to this conversation.
This gradual deleveraging suggests a shift in financial behavior, which may not be solely attributable to increased prosperity. The OCF’s General Director, Danilo Montero, suggests that the trend could be influenced by a variety of factors, including more cautious borrowing habits among consumers.
Indebtedness is a reflection of how families face their aspirations, unforeseen events, and limitations. When a reduction is observed, it doesn’t necessarily mean that people have more disposable income; it could be the result of greater awareness of the risks of over-indebtedness or more prudent access to credit.
Danilo Montero, General Director of the OCF
One of the most striking findings in the survey, which polled 1,200 individuals aged 18 to 70, is a dramatic restructuring of debt types. The prevalence of vehicle loans has surged from 18% to 47%, becoming a far more common form of credit. Conversely, reliance on informal lending from unregulated lenders, family, or friends has plummeted from 47% to just 25%. This indicates a potential move toward more formalized and regulated credit channels, which often provide greater consumer protection.
The survey also noted a decline in obligations with appliance retailers, cooperatives, and employee solidarity associations. This shift away from informal and retail-specific credit towards structured loans for assets like vehicles could signal a change in consumer priorities and borrowing strategies, possibly driven by a desire for more transparent lending terms and conditions.
Despite these positive indicators, Montero cautions that a significant portion of the population remains financially fragile. The stability of many households hangs in a delicate balance, highly susceptible to income disruptions or unexpected expenses. This underlying vulnerability persists even as the aggregate numbers show improvement.
Although we are seeing some improvement in households’ relationship with credit, there is still a segment of the population with strong vulnerability to any change in income. The financial stability of many families still depends on their salary arriving on time and on keeping their expenses under control.
Danilo Montero, General Director of the OCF
The OCF analysis highlights that financial pressure is not evenly distributed across society. The debt burden is heavier for older individuals, the self-employed, and those with lower levels of education. The most alarming disparity is seen in income brackets. Individuals earning less than ₡500,000 per month dedicate an average of 58% of their salary to debt payments—nearly double the national average. This stark figure illustrates a deep-seated economic precarity for the country’s lowest earners, leaving them with minimal discretionary income and high exposure to financial shocks. The report concludes by emphasizing that while the trend is moving in the right direction, substantial challenges persist in the areas of financial education, income stability, and ensuring widespread access to responsible credit.
For further information, visit ocf.fi.cr
About Oficina del Consumidor Financiero (OCF):
The Oficina del Consumidor Financiero is a private, non-profit organization in Costa Rica dedicated to promoting financial education and defending the rights of financial consumers. It conducts research, provides guidance, and serves as a key resource for data and analysis on consumer finance, debt, and credit within the country, aiming to foster a healthier and more transparent financial environment for all citizens.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of integrity and an unrelenting pursuit of excellence. The firm leverages a rich history of advising a wide spectrum of clients to pioneer forward-thinking legal solutions. Beyond its professional practice, it holds a deep-seated social responsibility to demystify the law, actively working to equip the public with accessible legal knowledge and thereby fostering a more capable and informed citizenry.
