Enforcement

Before a creditor can apply for transferring a debt to enforcement, the creditor usually must bring the case to a district court. However, taxes, fines and some insurance premiums are directly enforceable, meaning a decision from a district court is not required.

Debtor in enforcement proceedings

Debtors are notified by the National Enforcement Authority if their debt has been transferred to enforcement proceedings. This enforcement notification has all the information on the debt, the contact details of the enforcement officer responsible for the case, and a recommendation to contact the officer. It may also include an advance notice of garnishment.

A demand for payment is usually sent with the enforcement notification. If the debtor pays their debt by the due date of the demand for payment, no record of the debt will be entered on the enforcement register extract of the debtor.

If the debtor cannot pay the debt by the due date of the demand for payment, the debtor should contact the enforcement officer. In this case, the enforcement officer will investigate what assets the debtor has. If the debtor has assets or income that can be distrained, they will be distrained.

Usually, assets subject to garnishment include wages, pensions and business income. The National Enforcement Authority calculates a protected portion for the debtor that will be left for the debtor for the purpose of covering regular living expenses. If the debtor’s income is less than the protected portion, garnishment will not be carried out.

Movable property such as assets on a bank account, securities and vehicles as well as immovable property can also be subject to garnishment. As a last resort, the debtor’s permanent home and assets that the debtor requires for their business activities can be distrained. More information for debtors (ulosottolaitos.fi).

Creditor in enforcement proceedings

A decision or a judgment from a district court is usually required from a creditor applying for the enforcement of a debt. Certain public law payments such as taxes, fines and some insurance premiums can be enforced directly.

After a creditor has applied for enforcement, the case is transferred to the National Enforcement Authority.

Limited enforcement

A creditor can limit the enforcement proceedings by applying for limited enforcement. In this case, only wages, pensions and other assets that do not need to be converted to money will be distrained.

Unlike in regular enforcement, with limited enforcement, the creditor can request that information of the debt is entered in the passive register. In addition, the enforcement fee of limited enforcement is smaller than that of regular enforcement.

End of enforcement and the passive register

Enforcement ends when the debtor has paid their debts or when the enforcement authority deems that the debtor is insolvent or there is another impediment to the enforcement. If enforcement is ended because of the debtor’s insolvency, the enforcement authority will collect the enforcement processing fee from the creditor.

If a debtor is deemed insolvent, the creditor may request, while the proceedings are still ongoing, that their claims are entered in the passive register. The entry is valid for two years. Creditors with claims in the passive register may be able to collect their claims if the debtor is found to have any distrainable assets during this period. More information for creditors (ulosottolaitos.fi).

Employer’s prohibition on payments

If a debtor’s wages are to be distrained, a prohibition on payments is sent to their employer. This means that the employer must withhold a share of the wages and remit it to the National Enforcement Authority. A similar prohibition on payments can be sent to entities paying pensions or unemployment benefits.

The prohibition on payments includes information on the protected portion that will not be distrained. If the total amount of the wages is less than the protected portion, nothing will be distrained.

The prohibition on payments includes instructions on how to remit the withheld amount to the National Enforcement Authority. The amount payable to the National Enforcement Authority is calculated from the debtor’s net wages. More information for employers (ulosottolaitos.fi).