Opening of debt settlement proceedings and debt settlements

When debt settlement proceedings are opened, it implies the start of a process to enter into a debt settlement agreement. The opening of the proceedings is announced and serves to notify creditors to submit their claims.

A debt settlement is an agreement between a heavily indebted individual and their creditors to repay debts over a limited period. Typically, this agreement entails paying as much of the debt as possible over five years. Once the settlement period ends, any remaining debt will be cancelled, provided that the terms in the agreement have been met. This agreement allows the individual to regain control over their finances.

There are two types of debt settlements

The main conditions for a debt settlement are when the debtor is permanently unable to repay the debt and granting the settlement is not perceived as offensive to others.

When will the opening of the debt settlement and the debt settlement be cancelled?

It will be cancelled when

• a debt settlement agreement is entered into
• the negotiation period ends without an agreement being made

The enforcement authority notifies us when the settlement should be cancelled. For questions about cancellation, you must contact the relevant enforcement authority.

The announcement of the opening will be cancelled no later than one year after publication.

New rules effective from 1 January 2025 for financial undertakings and debt collection businesses

The claims from financial undertakings and debt collection businesses will lapse (preclusive effect) if they are not notified within the announced deadline.