Consumer Insolvency Law in Estonia and Norway: Comparative Aspects

Abstract

The authors examine and compare the rules on consumer insolvency in Estonia and Norway. Under Estonian law, consumers may obtain debt adjustments under the 2003 Bankruptcy Act (in the form of a debt release) or under the 2010 Debt Restructuring and Debt Protection Act (in the form of debt restructuring). These two acts apply to both entrepreneurs and consumers. In Norway, a Debt Settlement Act was introduced in 1992, allowing for debt settlements for consumers. Debt adjustment under general insolvency legislation is not regarded as a viable option for consumers in Norway, it being a rather costly and cumbersome procedure. In Norway, each municipality is obliged to offer debt counselling services to consumers, while in Estonia, debt counselling services are available through non-governmental organization (NGOs) and through some municipalities on a voluntary basis. The number of instituted proceedings for debt settlements (Norway) and for debt restructuring (Estonia) are relatively low: in 2014, the numbers stood at 57 per 100 000 inhabitants in Norway and 2 per 100 000 inhabitants in Estonia. The difference between the two countries may to some extent be explained by differences in legislation and in organization of debt counselling, but the authors conclude that the explanation must probably be found also in cultural, sociological and political factors.