Compulsory debt settlement

Compulsory debt settlement is an alternative if creditors and the debtor cannot reach agreement (voluntary debt settlement).

The court considers compulsory debt settlement 

If a debtor and his creditors cannot reach agreement and the debtor maintains his proposal for settlement, he can apply to the court for compulsory debt restructuring. The Enforcement Office will assist the debtor in this process. An application for compulsory debt restructuring must be submitted to the Enforcement Office before expiry of the debt negotiation period. The application is then sent to the court, which will summons the debtor and all known creditors to attend court. The proposal for compulsory debt restructuring will be attached to the summons. Creditors will be given a date by which they must submit written responses before the court hearing. If a response does not show that the court should reject ratifying the proposal without further recourse, it will only be taken into consideration if it arrives at the court before the deadline and the creditor has concurrently sent a copy to the debtor.

The outcome of court proceedings

The court shall ratify a proposal for a compulsory arrangement if the debtor fails to fulfil the terms of the law. The court can ratify debt restructuring even if the creditors have objections. If a proposal is deemed to be unacceptable, there is a procedural error or there are many disputed claims obscuring any grounds for considering the proposal, the court cannot ratify it. That means that the debtor cannot be granted debt restructuring. If the court does not ratify a request, the debtor can apply again if the problems that prevented it in the first instance have been remedied. A debtor can usually only be granted debt restructuring once. It is therefore important to submit a proposal that is realistic and that the debtor should be able to comply with. If the debtor fails to comply with an agreement with his creditors, they can demand cancellation of the arrangement at any time. If the court accepts an application for cancellation of debt restructuring, the debtor is back where he started before submitting his application for restructuring. The Oslo Enforcement Office's website has more details on the terms and applying for debt restructuring (link to

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