In today's world, people have a lot of financial instruments and opportunities at their disposal. Individuals, therefore, indebtedness often perceive too casually, and continue to stretch it beyond their means, which later leads to the problem of over-indebtedness from which it is not easy to get out. The aim of this paper is to investigate the reasons leading to over-indebtedness, as well as the prevalence of indebtedness in Croatia. The actual number of persons who are over-indebted can be estimated, however, as a universal definition of the over-indebtedness concept has not yet been established, it is difficult to make a precise estimate of the number of over-indebted persons. Personal over-indebtedness, in addition to financial exclusion and poverty, can also lead to social exclusion. The term social exclusion refers to the exclusion from participating, or limited access to the labor market, education, and social isolation. With the aim of facilitating the situation of over-indebted persons and giving them a fresh start, both socially and economically, various advisory services are being set up, along with a number of measures being proposed to tackle this problem. Great emphasis should also be put on financial literacy, which raises the level of individual responsibility in understanding and taking risks when making financial decisions, and helps in the development of personal borrowing plans.