Legal protection and insolvency

The Office of Bankruptcy Ombudsman | National Administrative Office for Enforcement

The Bankruptcy Ombudsman supervises bankruptcy proceedings

Source: The Office of Bankruptcy Ombudsman

Bankruptcies 2013–2017

The year-on-year number of debtors declared bankrupt decreased by 13 per cent in 2017. There are currently 2,966 bankruptcy proceedings pending of which 484 will continue under public receivership with state funds.

Special audits and costs of special audits 2013–2017

The number of special audits has remained on the previous year’s level. Special audits ordered by the Bankruptcy Ombudsman are mainly conducted on insolvent bankruptcy estates, in which the administrator has identified the cause for a more detailed investigation into the operations of the debtor prior to the bankruptcy.

The special audit costs decreased by 15 per cent from the previous year. As special audits are carried out in insolvent bankruptcy estates, recovery is only possible if the bankruptcy estate manages to accumulate its funds through a recovery action or criminal compensation.

Public receivership 2013–2017

The number of cases under public receivership has increased to 16.3 per cent of all pending bankruptcy proceedings.

Costs of public receivership 2013–2017

The costs of public receivership have been on a steady climb, although more than one third of bankruptcy estates under public receivership manage to accumulate sufficient assets to cover the costs of the proceedings.

The disbursements paid to creditors usually exceed the amount of expenses incurred by the public receivership. 

Citizens are running up debt – according to the statistics of the enforcement authorities

Source: The National Administrative Office for Enforcement

Finns are the most conscientious bill payers in Europe. However, the enforcement statistics show that financial difficulties are also on the rise in Finland. The amount of debt owed by Finnish citizens in enforcement proceedings is growing.

Indebtedness is on the rise

In Finland, the payment morality of citizens and companies is at a high level in international terms. Finns pay their debts and take care of their obligations. However, there are situations in which both companies and people run into debt, and enforcement proceedings are initiated.

Running up debt and becoming subject to enforcement proceedings do not constitute either shadow economy phenomena or economic crime. People in all income categories can end up in debt.

The shadow economy may be tempting

Those in financial difficulties may be tempted to do undeclared work, hide assets or neglect their obligations as an employer and otherwise in their business operations. For this reason, the grey economy and economic crime snapshot includes enforcement statistics.

Changes are evident in the statistics

The enforcement statistics provide us with information on changes in the amounts of debt and the number of debtors subject to enforcement proceedings. The statistics show the trend in the changes and help us to put things into perspective.

In fact, the enforcement statistics should be examined by comparing them with the observations and statistics of other authorities presented in this snapshot. This makes it possible to determine the correct scales and weights of issues and phenomena.   

Slight rise in the number of enforcement cases

Total number of enforcement cases initiated per year (no.)

Payments are made to applicants in about half of enforcement cases. The remainder revert to the applicant due to lack of means on the part of the debtor. The outcome of debt collection depends on several factors independent of enforcement.

About 90% of debtors subject to enforcement proceedings are individuals 

Debtors are divided into individual and corporate debtors. The distribution has remained unchanged. It should be noted that the same debtor may be subject to several proceedings in the enforcement system. This contributions or different kinds of receivables is the case, for instance, when the debtor pays their debts in full but later becomes subject to new enforcement proceedings.

Enforcement cases initiated by region 2015 - 2017 (no.)

Enforcement cases, total and grouped into taxes, other public law cases (for example, insurance payable to municipalities and other public organisations such as healthcare and day-care fees) and other matters (debt collection and proceedings under private law, alimony and fines).

Half of Finns live in Helsinki and other parts of Southern Finland, and more than half of new companies are established there. This is reflected in the regional distribution of enforcement cases. Indebtedness increases the risk that citizens will participate in the shadow economy.