Bankruptcy law

Receivables are worthless until debtors pay their bills. It is sometimes 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 that 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. In its simplest form, this means negotiating new payment schedules for or lower interests on debts. The other end 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.

Recovery of measures taken before

In connection with special collection, it is often necessary to consider the impact of any agreements or other measures that 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 the case of a bankruptcy, partly due to the nature of the proceedings.

Why choose Asianajotoimisto Sillanpää Oy?

Attorney Ismo Sillanpää has represented creditors in challenging collection assignments. He has also acted as the estate administrator or assistant to the estate administrator in numerous bankruptcy cases. This has allowed him to experience various kinds of proceedings for recovery.

Before joining us, Attorney Jyri Nikander used to work as a prosecutor, specialising in, for example, so-called financial offences (debtor’s criminal offences, tax fraud, accounting offences, etc.). During his career, he has also worked, e.g., in special collection with the enforcement authorities and has assisted his clients in cases related to company restructuring.

Typical assignments of Asianajotoimisto Sillanpää Oy related to special collection and bankruptcy law include:

  • offering consultation or assistance to the creditor in an assignment pertaining to a special collection;
  • bankruptcy estate administration;
  • acting as the attorney in proceedings for recovery or negotiations towards a settlement;
  • assisting parties in trials related to so-called financial offences.