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Financial aid for bankruptcy proceedings

Financial aid for people to pay collateral security for expenses related to bankruptcy proceedings.

For the application to be valid it is necessary that the applicant has  returned Tax returns to the Tax authorities for the last 4 years. 

If you intend to apply for financial assistance with payment of collateral security for expenses related to bankruptcy proceedings, the Debtors' Ombudsman encourages you to seek information on what it means to be declared bankrupt. The Act on Bankruptcy can be found in English here.  

Note that in order to become declared bankrupt, you will need to hand in a bankruptcy petition to your relevant district court, it is not enough to apply for the financial assistance.  When such a petition is handed in, a fee of 15.000 kr. must be paid, which is not included in the financial assistance.  
If you receive the financial assistance, you will receive a written statement of the financial assistance, which needs to be included in the bankruptcy petition to the district court. The Debtors' Ombudsman will then pay the district court.  
If the Debtors' Ombudsman denies you the financial assistance, the decision can be appealed to the Ministry of social affairs

Conditions for financial aid are: 

  • Applicant must be in a serious payment difficulty, where it is not considered likely that the payment difficulty will pass in a short time. 
  • Applicant must not be able to pay the collateral security for expenses himself/ herself, given his/ her assets and monthly payment ability. 
  • Applicant must have tried other solutions for his/ her payment difficulty or the Debtors' Ombudsman has assessed the payment difficulty of the applicant such that other solutions will not suffice. 

Financial aid is not granted if:

  • The circumstances surrounding the establishment of debt, or later actions taken by the debtor, suggest unequivocally that the debtor has conducted himself in a dishonest manner to be able to seek debt mitigation. 
  • The debtor has, either deliberately or through gross negligence, provided incorrect or misleading information on circumstances significant to the case.
  • The debtor has incurred an obligation which is significant relative to his/her financial situation as the result of behavior subject to penalty or compensation for damages.
  • The debtor has engaged in investments or taken actions that would have been voidable in liquidation proceedings.
  • The debtor has, in an objectionable manner, neglected to do his/her utmost to fulfill the obligations.
  • The applicant's debt mitigation has been cancelled pursuant to article 15 on the Act of Debt Mitigation, whereas the applicant has:
    • conducted himself in a dishonest manner to be able to seek financial aid. 
    • either deliberately or through gross negligence, provided incorrect or misleading information on circumstances significant to the case. 
    • incurred an obligation which is significant relative to his/her financial situation as the result of behavior subject to penalty or compensation for damages. 
    • engaged in investments or taken actions that would have been voidable in liquidation proceedings. 
    • in an objectionable manner, neglected to do his/her utmost to fulfill the obligations.
    • in an objectionable manner undertaken immoderate obligations. 
    • not set aside, from wages and other income, any funds in excess of those required by the debtor to support him-/herself and family.
    • not terminated leases and other contractual agreements entailing future expenditure which are not related to goods and services necessary for the support of the debtor or his/her household or for normal household operation.
    • delivered or pledged assets and valuables that could be useful to creditors as a form of payment.
    • undertaken new debts.

If you are not sure what your next step should be you can contact us and a counselor will contact you by phone 

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