Debt adjustment for entrepreneurs and self-employed persons
The debt adjustment process for private individuals is a lighter and more affordable process than corporate restructuring. In addition to your business debt, the debt adjustment process is used to manage your possible personal debt.
Debt adjustment is intended for persons who have too much debt in relation to their ability to pay or whose ability to pay has deteriorated due to illness or incapacity for work, for example.
If debt adjustment is granted, a payment scheme will be drawn up for you. The duration of a payment scheme is usually 3–5 years. If you retain your owner-occupied home during the debt adjustment, the duration of the payment scheme may be longer. Your remaining debts are forgiven once the payment scheme and any additional payments have been completed as agreed.
The financial and debt counsellor can help you prepare your application if necessary. You will be assisted throughout the process.
More information on debt adjustment on our website
Debt adjustment for various company forms
- Private entrepreneurs and self-employed persons can apply for a debt adjustment for private individuals for their business debt or personal debt.
Companies (general and limited partnerships, limited liability companies) are not eligible for a debt adjust-ment for private individuals for their business debt. However, an entrepreneur with a company may apply for a debt adjustment for their personal debt. - If your business operations have ended, you can apply for a debt adjustment for personal debt to manage the remaining business debt. You do not need to meet the conditions applied to entrepreneurs and self-employed persons, as the debt adjustment process for private individuals is applied to your situation.
Debt adjustment conditions for business debt
There are certain conditions for and impediments to a debt adjustment of a private individual. In addition to these, certain additional impediments and conditions apply to entrepreneurs.
Conditions for a debt adjustment for entrepreneurs include the following:
- Business-related debts cannot be adjusted if there is justified cause to assume that it is intended to prevent debt collection by creditors or otherwise infringe on creditors’ rights
- If the amount accumulated for the creditor is less than what the creditor would get through the debtor’s bankruptcy, this also constitutes an impediment.
- You are a private entrepreneur or self-employed
- In addition to you, your business had up to two employees in the last full financial year
- Your business generates enough revenue that you can pay your business expenses that incur during the debt adjustment
- Your business must generate profit
- Your available funds are more than zero during the debt adjustment
- Rebalancing the finances of your business does not require measures related to your business activities, e.g. corporate restructuring
To apply for debt adjustment, you must have an expert statement on the financial status of your business and its viability. For more information, please contact the KEHA Centre’s Talousapu financial helpline for entrepreneurs. This helpline will provide free advice from experts in business finances and how to make them healthy.
Debt adjustment conditions for the personal debt of an entrepreneur
The personal debt of entrepreneurs and self-employed persons can be adjusted regardless of the company form of the business. In this case, only personal debt is adjusted, i.e. business debt is not adjusted.
The following conditions must be met to be eligible for a debt adjustment:
- You have no business debt or very little business debt
- If you have a small amount of business debt, it must not be due or unpaid
- You can cover all expenses of your business
- The debt of liable partners of general and limited partnerships can only be adjusted if the company is solvent and not under the threat of becoming insolvent, and if corporate restructuring is being carried out
Debts from prior business activities are considered personal debt if the business activities have ended and the liabilities of the debtor have been sorted out.
Retaining assets
A private entrepreneur or self-employed person can retain their business assets in the debt adjustment if the assets are necessary for continuing business activities.
Guidance and information for entrepreneurs
The Yrittäjän talousapu counselling service provides expert advice on business finances and mending them. Access the service by calling, or submit a contact request.
The Suomen yrittäjät organisation and the Yrittäjän talousapu counselling service organise free training for entrepreneurs .
Guide ‘Company’s financial difficulties and their prevention’ (suomi.fi)
The Finnish Tax Administrations instructions on payment arrangements