This paper continues the strand that the first part — The Orderly Transition from the Fiat System to Gradido — opened on the hard case of sovereign debt and expressly left open at its end: the dissolution of private debt. It is the larger part of the financial layer — the debts of households and businesses clearly exceed those of the state (globally around one and a half times, for Germany around 1.65 times). Like the first part, this one understands itself as a feasibility and mechanism study, not a forecast: what is examined is whether and how private debt can be dissolved in an orderly way, not whether it will happen. The conceptual core is a single distinction — the debt is not forgiven but transformed: the existing loan contract is converted from euros to an interest-free Gradido loan, at a ratio of one to one. Unlike forgiveness, this gifts no one, creates no incentive to speculate, and leaves the money supply untouched; the transformation merely re-denominates, it creates nothing. Private debt behaves structurally differently from sovereign debt. Where the state is at once debtor anddriver of its own deleveraging, private debt rests on three parties — saver, bank, and debtor —, with the bank as an independent middle and without a central driver. The whole difficulty therefore sits not with the debtor but in the bank balance sheet. The load-bearing finding of this paper is that, along with the debt, the role of the bank is transformed: from risk-bearer, holding its own positions, maturities, and currencies against one another, to intermediary, matching savings deposits and loan demands — the sovereign-money position, here made into a transition task; its earnings shift from the interest margin to a service fee. A systematics orders the field: the axis secured / unsecured is the counterpart to the four-tier ladder of sovereign debt. The secured majority — in Germany around four-fifths of household debt — runs easily: the mortgage remains, the house remains collateral, no wealth is transferred. The genuinely unsecured core is surprisingly small (for Germany around 0.5 to 1.0 trillion euros), yet socially the weightiest. It is this core that poses the real test. It is predominantly over-indebtedness — and the evidence shows a human being, not a balance-sheet figure: the typical case carries around 13,000 euros of debt on an income at the poverty line, triggered by life crises (illness, unemployment, separation), only rarely by one's own misconduct. What destroys livelihoods today — because interest and arrears escalate the debt — becomes bearable in the Gradido system: interest-freedom takes the escalation out of the debt, and the Active Basic Income carries the income floor and works preventively. The paper keeps its limits open and honest: it is no panacea and names the open points — above all the legal structuring. Together with Part 1 (sovereign debt) and the planned Part 3 (GradidoTransform as a reserve asset), it completes the whole financial layer: What destroys livelihoods today becomes bearable — and can be dissolved over time.
Bernd Hückstädt (Fri,) studied this question.