1: When are you declared bankrupt?
In Finland bankruptcy can be declared if the debtor is unable to fulfill payments. Declaring the bankruptcy is decided by District Court and the petition can be filed bycreditor or debtor itself.
2: How long does it take to process a petition for bankruptcy?
The petition for bankruptcy must be processed without unnecessary delay. Usually the duration of the process varies from some days to several weeks. The process is faster when the petition has been filed by debtor itself.
3: What can you do if you disagree with the bankruptcy order by the court?
Bankruptcy decisions can be appealed to higher instance courts. It is not mandatory to use an attorney but it’s highly recommended.
4: What happens if you are declared bankrupt?
When the bankruptcy is declared the court appoints the trustee who controls the assets of the debtor. The trustee will sort out bankruptcy estateand will realize assets when it is necessary to pay the debts.
5: What duties and powers does the trustee have?
The trustee is obligated to take controlof thebankruptcy estate and manage and maintain the assets. Trustee has to take necessary actions to collect debts and secure the rights of bankruptcy estate. Trustee must draw the distribution list and after the realizations trustee will distribute the incomes according the payment order ofthe bankruptcy law. The trustee is obligated to report to police if he notices that the debtor has committed a crime.
6: What kind of obligations do I have as a bankrupt?
The person who has formerly managed bankrupt company or who been responsible for managing it, has to cooperate and provide information to the trustee. If the person fails to cooperate and fulfill his (or her) obligations, he (or she) can be fined or even face imprisonment.
7: How can I monitor the progress of the bankruptcy?
The bankruptcy process and the information related to it is open for public. The information can be obtained from the court and some organizations provide their information services (for example Suomenasiakastieto Oy – https://www.asiakastieto.fi/web/en/).
8: How long does a bankruptcy last?
Every bankruptcy is different. In practice, bankruptcy lasts for at least 12 months. If legal proceedings are involved, the bankruptcy may last longer. In the end, the bankruptcy generally ends due to insufficient funds or a (partial) payment of the creditors and the legal entity is dissolved.
9: Can I make arrangements with my creditors?
The arrangements between the debtor and the creditor are possible before and during the bankruptcy process.
10: How can an employee collect outstanding salary from his bankrupt employer?
In Finland employees wages and pension benefits are secured by system called “palkkaturva” when employer has been declared in bankruptcy. The wages can be paid up to 15.200 euros per employee.
11: What important advice can be given to a company director in the event of imminent bankruptcy?
It is important that a proper administration and the accounting has been kept and can be provided to the trustee. If the company still has the funds it is advisable to contact an attorney who can assist in the bankruptcy process. The company will be able to affect to the appointment of the trustee.
12: Is there a special arrangement for a private person who is in danger of going bankrupt?
Bankruptcy of the private person is possible in Finland but it is very unusual. Private person can apply for the process for restructuring of his or her debts. Help for the process can be obtained as a public service and the district court decides the payment plan which is supervised by appointed lawyer. Restructuring process last usually 2-5 years and after that the remainders of the debts are ineligibleto collect. In principle the restructuring process can be obtained only once per debtor.