19 December 2014
The Act on the Adjustment of the Debts of a Private Individual will be amended as from 1 January 2015. After the amendments in question have been implemented, debt restructuring will be available to private entrepreneurs under certain conditions. Access to the debt restructuring process will also become slightly easier for everyone.
Until now, only the corporate restructuring process has been available for debt accumulated by a company. In the future, small-business entrepreneurs will be able to apply for the debt restructuring process for private individuals, which is a lighter and more inexpensive process. However, very strict conditions will be set for this debt restructuring process for entrepreneurs. For instance, the business operations involved will have to be relatively small in scale and sufficiently profitable in order for the costs of the business operations to be covered in the future and for the debtor to be able to pay off at least some of his debt to his creditors.
The debt of a business operated in some corporate form (general partnership, limited partnership, limited liability company) cannot be handled through the debt restructuring process for private individuals.
Financial and debt counsellors will provide entrepreneurs with free assistance with their debt restructuring applications. However, entrepreneurs should first contact the Yritys-Suomi Talousapu helpline. This helpline will provide a preliminary assessment of the profitability of business operations, and if necessary discuss alternatives to the debt restructuring process with the caller.
The nationwide number for the helpline is +358 2950 24880 (in Finnish) (hours: 9:00 a.m.–4:00 p.m. between Mon and Fri), and the Talousapu website can be found at www.yrityssuomi.fi/talousapu (in Finnish).
The unemployed will have easier access to the debt restructuring process
Until now, the debt restructuring process has not always been available for unemployed people, since the primary goal has been for them to be employed and, therefore, be able to manage their debt better in the future. At the beginning of 2015, the provisions will change so that unemployment cannot prevent an invidual from accessing the debt restructuring process – at least in case in which the unemployment has continued uninterrupted for 18 months. In addition, an unemployed individual can access the debt restructuring process faster if his/her employment is very unlikely, or if a sufficient ability to pay would not be generated even while working.
Simultaneously, the law will change to make working during the course of the debt restructuring process more profitable. The annual limit on the so-called additional-payment obligation will be increaed to EUR 2,000. The debtor will be able to keep half of any income exceeding the limit, with only a half paid to his creditors.
The availability of the debt restructuring process to other private individuals will concurrently be increased slightly. When making a debt restructuring decision, insufficient ability to assess the handling of debt repayment will be taken into consideration in the case of young people, for instance. The lender's responsibility concerning the marketing of debt and the investigation of the debtor's ability to pay will also be taken into account.
At the beginning of 2015, the provisions pertaining to the expiry of debt will change in such manner that all debts will expire once and for all after the determined periods. For instance, tax-related debt and other debt subject to public law currently expire after five years, and debt for which a court-determined payment decision exists expires after 15 or 20 years. After the legislative amendment, all debts without a payment decision will expire after 20 years of the debt falling due. However, the provision features a five-year transition period, meaning that all debts that fell due before 2000 will not expire until 2020.
The contact information for all financial and debt counsellors can be found on the FCCA website. The website also includes information on the debt restructuring process.