Application

Familiarize yourself with the conditions and impediments for debt adjustment and discuss your situation with a financial and debt counsellor before applying for debt adjustment. The financial and debt counsellor will help you examine your financial situation comprehensively and knows how to consider your personal situation.

Make sure that your income will cover your everyday expenses. This ensures the debt adjustment is successful and that your funds are sufficient.

• Plan your finances regularly. Monitor your income, expenses and spending.
• Critically examine your spending, consider whether your purchases have been necessary, and try to compare prices and arrange competitive tendering for prices. Try to put money aside whenever you can.
• Take advantage of our materials for personal financial management .

A financial and debt counsellor will prepare your application with you and determine your debt situation based on the information you give. Usually, you are asked for the following information and documents:

• Documents on your income, expenses, assets and health status.
• A written statement from you on your debt history. The statement should explain how you incurred the debt and why have you been unable to repay it.

The financial and debt counsellor will then submit your application to the district court. The financial and debt counselling services and the processing of your application by a district court are free of charge.

Processing the application

The financial and debt counsellor will assist you throughout the processing of your application.

• During the processing of the application, try to pay your mandatory expenses and maintain your ability to pay. Open all letters you receive and save the ones related to your finances. You should also do your best to ensure that you do not incur any new debt.
• Debt collection measures and any garnishment of income will usually continue until the district court issues a decision on your case.
• The district court will decide on your case and confirm your payment scheme proposal, if the proposal is appended to your application. The district court will decide separately on your possible application for a deferral or restriction of garnishment.
• The district court will send your application and the account of your debt history to your creditors, co-debtors and guarantors. They have the right to submit a statement on your application.
• If any of the parties objects to your application, the district court will summon you to a hearing or ask you to submit a written response. You must respond to the request for a statement within the deadline provided.

The district court will conclude the processing and either reject your application or grant a debt adjustment.

Debt adjustment decision

Favourable decision

Debt adjustment commences when a district court issues a decision on its commencement. The district court either confirms the proposed payment scheme at the same time they issue the decision, or tasks a financial and debt counsellor or a liquidator with drafting a payment scheme.

The payment scheme commences on the date specified in the district court’s decision.

Any debt incurred after the commencement decision date is not included in the debt adjustment. A debt adjustment entitles you to derogate from any contract clauses to terminate fixed-term contracts.

Negative decision

If a district court rejects your application and you want to appeal the decision, contact your financial and debt counsellor as soon as possible. An appeal against the decision can be lodged with the Court of Appeal. You have seven (7) days from the date of the decision to declare your discontent with it. The appeal document must be submitted to the district court office within 30 days.