Receivables are worthless until debtors pay their bills. Sometimes it is necessary to resort to compulsory enforcement or to threaten to take legal action against a debtor in order to collect outstanding claims.
Bankruptcy means insolvency proceedings that aim at settling the claims of all creditors at the same time. The proceeds are distributed among the creditors in order of legal priority in relation to the amounts owed to each creditor. Enforcement, on the other hand, generally refers to the measures to collect the claims of one creditor, regardless of other obligations the debtor may have or other creditors.
Other insolvency proceedings
In addition to these insolvency proceedings, company restructuring and debt restructuring for private individuals are recognised by law in Finland. The idea of company restructuring is to save a viable company that has run into debt by reorganising the company’s debts. At its simplest, this means negotiating new payment schedules for or lower interest on debts. The other extreme of the range of measures available in company restructuring is to cut the capital of the debts. In most cases, company restructuring requires the use of various measures at the same time.
The basic idea of debt restructuring for private individuals is the same as that of company restructuring, but the proceedings are slightly different when the debtor is a private individual. One of the measures of debt restructuring is the removal of the obligation to pay, which is not possible in the case of company restructuring.
Resorting the measures taken before
In connection with special collection, it is often necessary to consider the impact of any agreements or other measures the debtor has taken before the bankruptcy or the commencement of enforcement actions on the ability of other creditors to collect their claims. If it becomes apparent that an arrangement would compromise the benefit of other creditors or favour one creditor at the expense of others, it may under certain circumstances be possible to resort to a legal remedy called recovery to challenge a measure, i.e. to restore the situation that preceded the measure, as if the measure had never been taken.
While an action for recovery is possible in connection with company restructuring or debt restructuring for private individuals, it is much less common than in a bankruptcy, which is partly due to the nature of the proceedings.
Why to choose us?
Attorney Ismo Sillanpää has represented creditors in challenging collection assignments. He has also acted as an official receiver or assistant for the official receiver in numerous bankruptcy cases. This has given him experience in various kinds of proceedings for recovery and proceedings concerning financial offences (debtor’s criminal offences, tax fraud, accounting offences, etc.).
He has also worked on assignments that concern company restructuring, such as assisting in drafting the application for restructuring and representing the creditor in restructuring proceedings.
Asianajotoimisto Sillanpää Ltd, Attorneys-at-Law typically works on the following types of assignments concerning special collection and bankruptcy law:
- Consultation or assistance for the creditor in assignments related to special collection activities;
- Administration of bankruptcy estates;
- Acting as a representative in proceedings for recovery or the related negotiations for settlement;
- Assistance to parties in legal proceedings on financial offences.