Vesa Muttilainen
SUMMARY
Elisa Valkama
National Research Institute
Research
of Legal Policy
Communications no. 56
THE PROGRAM FOR VOLUNTARY DEBT
SETTLEMENT – EXPERIENCES AFTER ONE YEAR
The focus of the study and material involved
The status of debtors facing debt problems has improved considerably since the
early 1990s. The act on debt adjustment (Act 57/1993), debt counselling
services and a number of other reforms have assisted debtors to manage severe
debt problems. Notwithstanding, there are debtors who have failed to get relief.
In spring 2002 the government and creditors agreed on a program for a
voluntary settlement of debts to assist debtors who, since the economic
depression of the early 1990s, have faced problems in paying their debts. The
program involves a voluntary agreement aimed at improving the position of
these debtors, applying the rules established in the act on debt adjustment.
The target group for the debt-settlement program is debtors and
guarantors whose debt problems derive from the years 1990–1994. The
program involves bank creditors, collection agencies and also some other
creditors. It is up to the creditors to initiate the procedure. A letter proposing a
settlement of the debts is sent to all debtors belonging to the target group. If a
debtor applies for a voluntary settlement of the debts, the main creditor works
out a settlement for the debtor, involving all his or her creditors.
The study examines the implementation of the debt-settlement program
during its first year. Focus is placed on how widespread such cases have been,
as well as the position of debtors and the content of the agreements that have
been reached. The empirical parts of the study are based on creditors' statistics
and on specific material concerning cases that creditors have settled (n=95).
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The number of debt agreements
During the first year of the debt-settlement program banks and collection
agencies addressed a letter proposing a debt-settlement to 73,000 customers
facing problems in paying their debts. D