The last option for solving over-indebtedness is to apply for statutory debt restructuring for private individuals. At all stages of the process and during the payment scheme, the debtor is entitled to obtain assistance and counselling from municipal financial and debt counsellors.
Debt restructuring proceeds as follows:
- The debtor's financial status is examined (amount of debt, income, assets and payment capacity).
- Whether solving overindebtedness by making arrangements with creditors is possible is examined.
- In case a settlement with creditors fails to be achieved, a debt restructuring application is submitted to a court for processing. Debt restructuring must be applied for by filing a debt restructuring application form confirmed by the Ministry of Justice at the district court of the debtor's domicile. Application forms are available at the district court offices and legal aid offices, from financial and debt counsellors, and on the judicial administration's website.
- If the preconditions for debt restructuring are fulfilled and no impediments exist, the district court in question will initiate the debt restructuring process. Following this, the debtor or an executor appointed by the district court must draft a payment scheme proposal that matches the debtor's payment capacity.
- Each party (the debtor, creditors, co-debtors) will have the right to submit a statement on the payment scheme.
- The district court will confirm the payment scheme if the preconditions exist for debt restructuring and payment scheme confirmation.
- In the debt restructuring process, the debtor will be free of debt once the payment scheme ends and the debtor has fulfilled his or her payment obligations determined in the payment scheme.