Debt adjustment matters

By way of debt adjustment, an insolvent individual heavily in debt may work to remedy his or her financial situation.

  • A debtor can apply for debt adjustment from the district court with jurisdiction in his or her municipality of residence.
  • The applicant for debt adjustment should first contact the financial and debt counselling services at a legal aid office.
  • A district court may confirm a payment schedule for the debtor, laying down how he or she is to repay the debts during the following years.
  • The duration of the payment schedule is three to five years; during this period, the debtor must assign all possible non-essential funds for repaying the debts.
  • Once the debtor has repaid the debts to the extent prescribed in the payment schedule, he or she is released from liability regarding the remainder of the debts.
  • The payment schedule may be altered upon application, if the circumstances of the debtor undergo essential changes while the schedule is in effect. If the income of the debtor increases or his or her payment capability is otherwise improved, he or she must increase the amount by which the debts are paid, as prescribed in the payment schedule.
  • If the debtor fails to follow the payment schedule, it may be declared lapsed.

For more information on financial and debt counselling,, see the website of Financial and debt counselling.

Published 25.7.2019