Enforcement

The activities of the enforcement authorities are based on the law. One of their main tasks is to collect debts. The enforcement authorities protect the rights of both debtors and creditors.

A creditor may apply for enforcement if a debtor does not pay a bill voluntarily.

Taxes, municipal charges and other public-law charges are directly enforceable without a court decision. The enforcement of other charges requires that a district court issue a judgment on the debt. If the creditor applies for a judgment, the district court will investigate the validity of the debt and impose a payment obligation on the debtor. The enforcement authorities also collect fines, fixed fines and other monetary sanctions if they are not paid voluntarily.

The collection methods used by the enforcement authorities include sending payment demands, garnishment of income and distraint of assets. The enforcement authorities first try to get the debtor to pay the debt by sending a demand for payment. If the debtor does not pay the debt after having received the payment demand, the enforcement authorities will garnish the debtor’s wages or salary, pensions or business income or distrain their property or assets. The distrained property can be sold to cover the debt.

For more information, please see the website of the National Enforcement Authority Finland.

Garnishment and distraint

The enforcement authority will send a notification to the debtor when a debt enters enforcement proceedings. The notification indicates the debt subject to enforcement and the contact details of the enforcement officer responsible for the matter and exhorts the debtor to contact the officer. The notification also includes an advance notice of garnishment. A demand for payment is sent together with the enforcement notification. If the debtor pays their entire debt by the due date indicated in the payment demand, information that the debt was collected through enforcement will not be entered in the enforcement register and the debtor’s assets will not be searched.

If the debtor does not pay the debt voluntarily, the enforcement authorities will undertake measures to search for the debtor’s assets or income and carry out garnishment or distraint. Net earned income and other recurring income, such as pensions, maternity allowances and sickness allowances, can be garnished. The amount to be garnished will be calculated based on the total amount of the debtor’s wages or salary and other recurring income.

In addition to wage garnishment, the enforcement authorities may distrain property, funds on a bank account and tax refunds. Social benefits, such as social assistance, housing allowance and child allowance, cannot be garnished. As a rule, ordinary household effects are not distrained, nor is a reasonably priced car, if the debtor needs it for commuting, for example.

When determining the amount to be garnished, a protected portion will be calculated for the debtor. The amount of the protected portion depends on the number of the debtor’s dependents, such as children. The protected portion is the sum of money that the debtor will be left with each month.

The amount to be garnished will be determined based on the number of times the combined amount of the debtor’s income and benefits exceeds the amount of the protected portion. The garnished amount is often 1/3 of the debtor’s net income. The amount of the protected portion is based on the law and confirmed by decree of the Ministry of Justice. The euro amounts used for calculating the protected portion usually change each year.

For more information on how the amount to be garnished is calculated, see the website of the National Enforcement Authority Finland. There are also examples on the website.

Relief from garnishment

A debtor may obtain relief from garnishment, but this is subject to strict conditions. When child maintenance payments are being collected, changes to garnishment can only be made on serious grounds. A precautionary distraint may be carried out in connection with granting relief, if necessary. An enforcement officer has the discretion to decide on any relief.

Payment-free months

Once the garnishment has been in effect for more than a year, the debtor can be granted one to three payment-free months a year. The prerequisite is that the debtor’s net income is less than twice the amount of their protected portion, their necessary housing costs or other living expenses are high in relation to the amount remaining after the garnishment, or there is another special reason for the suspension of the payment obligation.

If the debtor’s ability to pay has deteriorated significantly

The amount to be garnished may be reduced, upon application, if the debtor’s ability to pay has deteriorated significantly. The ability to pay may deteriorate as a result of high healthcare expenses, unemployment or child maintenance payments, for example, or for some other special reason.

Deferral of garnishment if the debtor becomes employed

If the debtor finds employment after having been unemployed for more than a year, they can apply for a deferral of garnishment for a maximum of six months from the beginning of the employment relationship. The granting of deferral is subject to certain conditions.

The debtor can try to agree on a payment schedule with the enforcement officer in order to make the payments directly to the enforcement authorities. If wages are garnished, the employer will be informed of this.

Payment time

The enforcement officer may grant an extension to the payment time on the request of the debtor. There must be a special reason for the extension, and it must be stated in the request. The maximum length of the extension is three months from the due date of the payment demand.

Payment schedule

Instead of wage garnishment, the enforcement officer may agree with the debtor in writing that the debtor will make the payments to the enforcement officer in accordance with a payment schedule. The payment schedule is set up for the same amount as garnishment.

Payment agreement

The enforcement officer may also garnish wages or business income in accordance with a written agreement concluded between the creditor and the debtor, if the income is garnishable and the agreement cannot be deemed unreasonable. In a payment agreement, the creditor and the debtor may agree on the amount to be garnished, reduce the amount of the debt or shorten the duration of the garnishment, for example. However, the debtor must be left with at least the protected portion to be able to pay for their living expenses.

Enforcement fees

The enforcement authorities charge a scheduled fee each time the debtor makes a payment. A scheduled fee will no longer be charged when the debtor has paid the fee for 18 months during a two-year period.

For more information, please see the website of the National Enforcement Authority Finland.

Paying your debt: payment time, payment schedule and payment agreement
Deferral or restriction of garnishment and holiday months