Legal protection and insolvency
The Office of Bankruptcy Ombudsman | National Enforcement Authority Finland | KEHA Centre Pay Security
The Bankruptcy Ombudsman supervises bankruptcy proceedings
Source: The Office of Bankruptcy Ombudsman
Bankruptcies in 2020–2024
There have not been enough positive changes in the economic environment and the number of insolvency proceedings has remained high. For the Office of the Bankruptcy Ombudsman, the prevailing uncertainty has meant a constant increase in the number of supervised insolvency proceedings. The Bankruptcy Ombudsman has been actively monitoring and communicating the evolution of the number of insolvency proceedings, which has also been reflected in the financial media coverage.
Compared to the annual numbers in the early 2020s, around 50% more bankruptcies started last year and the threshold of 3,000 bankruptcies was exceeded. A total of 3,035 (2023: 2,715) bankruptcy proceedings were initiated in 2024. The number of initiated bankruptcies increased by 12.5 per cent from the previous year. There has been a similar change in the number of cases of enterprise restructuring as in bankruptcy proceedings. Compared to the early 2020s, the number of restructuring proceedings has also increased by around 50%. In 2024, a total of 318 restructuring proceedings were started, which is 3.9% more than in the previous year (2023: 306).
Public receiverships in 2020–2024
In 2024, 51 new public receiverships were initiated and the level of public receiverships is now at the target level. Currently, 489 public receiverships are pending, accounting for 12 per cent of all pending bankruptcy cases.
Special audits in 2020–2024
A total of 123 special audits concerning debtors’ operations, administrative bankruptcy estate audits and finalisations of accounting records were conducted.
Costs of special audits in 2020–2024
In 2024, special audit costs totalled roughly EUR 843,861, while approximately EUR 271,784 were recovered from bankruptcy estates.
Costs of public receiverships in 2020–2024
Public receivership costs totalled EUR 1 179,432 (including VAT). A total of EUR 399,468 was recovered from bankruptcy estates in previously paid public receivership costs. Roughly EUR 1 064,650 were paid to creditors in disbursements from the public receivership cases closed in 2024.
Enforcement measures are taken as a response to neglecting an obligation
Source: National Enforcement Authority Finland
The enforcement authorities are part of the judicial administration. They carry out court rulings and collect directly distrainable receivables, such as taxes, fines and insurance contributions. The enforcement authorities seek to combat the shadow economy and economic crime through their statutory tasks; that is, efficient enforcement collection. They also generate information needed in determining creditworthiness.
They co-operate actively with other authorities in combating the shadow economy and seizure of criminal proceeds, such as with the Police, Customs and Tax Administration. The objective is to take the proceeds of crime away from the offender and thus make it more complicated to operate a business that is based on criminal activities. The enforcement authorities identify assets for recovery proceedings. They may also apply enforcement measures if the debtor uses artificial arrangements to hide assets from creditors and avoid enforcement. Such cases are mainly dealt with by enforcement units in charge of special collection measures, which focus on the more time-consuming and labour-intensive cases.
Indebtedness remains high
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.
In recent years, the enforcement authorities have paid close to a billion euros per year based on applications
In 2024, approximately EUR 1.24 billion were collected. In special enforcement, there is annual variation in the amount of monetary receivables paid to creditors and the number of debtors investigated. In 2024, 212 new special enforcement investigations on debtors were started and the enforcement matters of 238 debtors were processed with approximately EUR 30 million collected.
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 website also 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 on the website.
Record amounts were paid to creditors
In 2024, 2.8 million cases were submitted to the National Enforcement Authority, which is around 8.2 per cent more than in 2023. In contrast, in 2024, the number of cases related to taxes increased by around 1.2 per cent compared with the previous year. Private law cases creased by nearly 4%. The number of corporate debtors increased 2,5 per cent.
After the National Enforcement Authority’s organizational restructuring, 2024 marked the fourth full year of operations. A total of EUR 1.24 billion were collected. An increase of 3,9 % was seen compared to the previous year. However, in euros, this is still the second highest amount ever.
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 matters. Indebtedness increases the risk of participating in the shadow economy.
Pay security payments correlate strongly with economic trends
Source: Development and Administrative Services Centre
Pay security covers employees’ employment-related claims in situations where the employer is insolvent. Statistics on the amount of pay security represent the significant correlation between pay security and economic trends. Employees’ claims are transferred to the state when pay security is paid. Only a fifth of the paid amount can be recovered from insolvent employers.
Neglected statutory employer contributions or notifications do not prevent pay security, but they are rather indications of employers’ insolvency, which is a requirement for pay security. In case law, pay security can, however, have been rejected if the mutual understanding between the employer and employee for carrying out work as undeclared can have been demonstrated.
Preventing misuse is one reason for rejecting pay security, and these cases may also involve shadow economy operators. Roughly half of misuse cases involve situations where an employee has considered to have become aware of their employer’s insolvency after an extended period of unpaid work.
In 2024, 6.1% of decisions were based on misconduct (6.4% in 2023). On the grounds of misconduct, a total of 252 decisions rejected claims (2023: 272) EUR 2,372,625 (2023: EUR 2,256,082).