The line between paid work and entrepreneur-like operations has become vaguer, and ever more people work on the borderline. Many people are self-employed and offer their work simultaneously to several employers.
Even though a debt arrangement is primarily intended to be used as a solution to the problems of private households, even self-employed debtors may be granted such a debt restructuring for their debts. The legislation will apply to private entrepreneurs and self-employed persons. The legislation will also improve an entrepreneur's possibility of restarting closed business operations in the same line of business. In this case, debt restructuring also covers debts from previous business operations.
A debtor engaged in business activities may apply for a debt arrangement:
only for the debts of their private household; in this case, the business is profitable and its debts are paid with the income from the business operations
both for the debts of their private household and for debts related to business operations.
Preconditions for being entitled to a debt arrangement:
The entrepreneur lives permanently in Finland and is insolvent.
The business operations are relatively small-scale, i.e. the operations are primarily based on the entrepreneur's own work contribution.
The business operations are viable and profitable, i.e. the rehabilitation of the business does not require corporate reorganisation.
The business operations provide you with an adequate income for at least some degree of solvency, calculated in accordance with the Act on the Adjustment of the Debts of a Private Individual.
In the future, you will be able to pay the new obligations and debts of the business operations fully and on time.
The operations must, therefore, be profitable, and may be a better or the only alternative source of income for the debtor. For the creditors, it may be more profitable to enable the entrepreneur to continue business operations and to use the income to pay their debts than to terminate the business operations, leaving the debtor unemployed.
Debt arrangement may become possible when the business is made profitable or the situation is otherwise remedied so as to enable a debt arrangement. For example, the company's accounts may have been neglected and are brought up to date, or an unprofitable part of the business is discontinued.
A debt arrangement can also be granted to an entrepreneur whose financial problems are only related to their private life. Debts from previous business operations that have ended are regarded as private debts.
If the business operations are not profitable, a debt arrangement may become possible when the business is closed down.
Closing down a business does not automatically lead to being granted a debt arrangement, because there may be some other obstacle to a debt arrangement, such as a crime-based debt or the preconditions for a debt arrangement are not otherwise met.