Debt restructuring
If you owe a significant amount of money to one or more creditors and you are unable to pay off your debt within the next few years, you can apply for debt relief. A debt relief can either reduce or cancel the entire debt. To apply for debt relief, there are a number of requirements and rules for you as a debtor that you must meet.
How to get a debt relief?
Getting a debt relief is far from easy and not everyone is granted one.
Only private individuals can be granted a debt restructuring. This means that companies, businesses and associations cannot apply for debt relief.
In addition, debt relief must be likely to improve your financial situation and you must not be able to pay the debt within the next several years. In addition, there are a number of requirements that you must meet. For example, you must have a full-time job, a stable fixed income and housing conditions.
If you own assets such as a home, car or similar, the court can order these to be sold before granting debt relief.
Who handles and processes debt restructuring?
As a rule, it is the probate court, which is part of your local city court, that handles and processes debt restructuring. If you live in Greater Copenhagen, it is the Maritime and Commercial Court that handles debt restructuring.
We always recommend that you get professional help from a debt counselor, lawyer or similar - prior to a debt restructuring. It can often be a good idea to have a third party involved.
How many people get a debt restructuring
Not everyone who applies for a debt restructuring is successful. The outcome often depends on compliance with the demands made. At the same time, there are often big differences between the individual bankruptcy courts. For example almost 45% got a debt relief in Hjørring judicial district - while that figure was as low as 14% in Greater Copenhagen. Statistically, there is thus between 25% and 35% chance of obtaining a debt relief in Denmark.
Approximately 2,800 - 3,000 debt reliefs are applied for annually - and between 2,000 - 2,200 of these were granted.
Want to know more about debt restructuring?
If you want to know more about debt restructuring, the requirements and, most importantly, how to get started, we always recommend that you contact your local probate court.
You can also find much more information, material and application forms on the website of the Probate Court(https://www.domstol.dk/alle-emner/gaeld/gaeldssanering/)
