Debt restructuring
Debt can be incurred by taking out a loan or purchasing something with credit. In addition, debt can be incurred because of statutory obligations, for example by not paying your taxes. The payment schedule or repayment instalments of a debt can be reorganised if the debtor’s financial situation changes or the debtor is unable to abide by the original payment scheme because of other reasons.
Debt payment scheme
If you start accumulating debt, the first option for managing the debt is to negotiate on the payment schedule with the creditor. When negotiating with creditors, honestly let them know why you have difficulties with paying.
Extending the payment period may help if your payment difficulties are caused by a temporary worsening of your financial situation because of a medical condition, for example.
If the payment difficulties are more long lasting, a debtor and a creditor can agree on a payment scheme. In a payment scheme, they can agree on an extended repayment period, smaller instalments, payment-free periods or a lower interest rate, for example. A scheme made with a creditor is usually subject to a fee (€20–€50/scheme).
A payment scheme can be agreed directly with the creditor
Settlement
If the debt is old, the debtor can negotiate on a settlement with the creditor. This means that the creditor forgives the debt or a part of it, such as any late-payment fees incurred. Settling a debt is voluntary for creditors.
Debt consolidation
It may be possible to consolidate your debts with a consolidation loan. In this case you will usually have only one loan left to repay, and you may receive a longer repayment period or a lower interest rate for the loan than for the original loans.
A voluntary consolidation loan can be applied for from any bank or credit institution. If a debtor can provide securities or a guarantor, the interest rate and expenses of the loan are lower.
Another option are the social loans provided by wellbeing services counties. These are aimed at those who are not eligible for other loans because of a lack of securities, a payment default entry, or a debt that is in collection or enforcement.
In addition, the Guarantee Foundation grants guarantees for consolidation loans. In this case, you do not need to provide securities or a guarantor yourself. The Foundation’s guarantees can be granted even if you have a payment default entry. More information on the Foundation’s guarantees (takuusaatio.fi).
Debt adjustment
Debt adjustment is the means of last resort for restructuring your debt. Before resorting to debt adjustment, you must have exhausted all other possible means to resolve your situation. Financial and debt counselling can assist with finding out your options and applying for a debt adjustment from a district court.
If a district court issues a decision to start debt adjustment, it confirms a payment scheme for the debtor that usually lasts for three to five years. The period may be longer if the debtor retains a home they own during the debt adjustment. All unpaid bills and debt of the debtor are included in the debt adjustment, including those where the creditor is a private individual.
In debt adjustment, the debtor’s available funds will be calculated, meaning the sum that the debtor must pay towards the debt every month. After the debtor has paid the share of the debt indicated in the payment scheme, the rest of the debt is forgiven. If the debtor’s income increases or they receive a monetary gift or inheritance during the payment scheme, some of this income will be used towards repaying the debt.
A guarantor or a co-debtor, meaning a person that has taken out a loan with another person, may also be granted debt adjustment. More information on debt adjustment (oikeuspalveluvirasto.fi).