Due to the interest rate crisis, the bankruptcy law will be temporarily amended to extend the debt repayment period from 7 to 30 days.
Taxman, occupational pension companies, banks and other corporate creditors will soon be able to file for bankruptcy for companies that default. The bankruptcy protection that came into force last spring will end at the end of January.
At the same time, the position of debtors will be eased by a temporary change in the law, which will give companies in difficulty to pay more time to service their overdue debts. The president of the republic is due to confirm on Friday a temporary amendment to the bankruptcy law, which will give companies 30 days instead of the normal 7 days to pay off the debt that led to the reminder. The change is valid until the end of September.
Strictly speaking, an amendment to the law extends the period during which a company must service a debt that has given rise to a reminder or can be presumed insolvent. A declaration of insolvency is a precondition for the opening of bankruptcy proceedings.
Last In the spring, when the interest rate crisis hit Finland, a temporary amendment was made to the Bankruptcy Act, which completely abolished the presumption of insolvency. In this way, creditors could not file for bankruptcy in the midst of crisis companies in difficulty. The derogation was initially in force until the end of October, but was extended until the end of January.
At the same time, when Parliament approved the extension of the exemption, it required the government to look for other ways to alleviate the situation for companies.
With a change in the law trying to prevent the dreaded wave of bankruptcy. The bill anticipates that the removal of bankruptcy protection in February could lead to creditors hastily recovering their claims incurred over the past year.
“When creditors’ ability to file for debtor bankruptcy has been hampered for nine months, creditors may not wait for payment as long as under normal circumstances. The purpose of the proposal is to guarantee debtors a reasonable payment period even in these circumstances, ”the bill states.