After bankruptcy

Bankruptcy will always affect your financial situation:

• Your income will usually decrease, as you will no longer receive pay from your company.
• Bankruptcy may leave you with major debts, as you lose the money you have invested in your company and have to pay back the debts of the company you have guaranteed.
• To pay the debts, you may have to give up your apartment.
• A payment default entry of bankruptcy in the credit register makes it more difficult to obtain a loan or a credit card. The entry is usually removed from the credit register within five years of the start of the bankruptcy. The entry will be removed within one month after you have paid the debt that led to it and the credit information company has been informed of the payment.

Register as an unemployed jobseeker with your local employment services immediately after the end of your business activities in order to receive unemployment benefits. Find out if you could receive general housing allowance or social assistance from Kela. You can find more detailed instructions on securing income and applying for work in the Unemployment guide.

A private trader can get an allowance from the bankruptcy estate if they no longer receive enough income due to the bankruptcy. Payment of the allowance requires that the estate has funds to pay for it. The allowance may be paid for a maximum of six months following the start of the bankruptcy.

If you are left with personal debt from your business activities, you can apply for debt arrangement of a private person after the end of business activities, or you can apply for an arrangement loan from a bank for the payment of old debts and a guarantee for the arrangement loan from the Guarantee FoundationOpens in a new window..

You can get help with applying for a restructuring loan and a debt arrangement for a private person from Financial and debt counselling. Also read the Guarantee Foundation’s instructions in Finnish for coping with debtsOpens in a new window. and the Suomi.fi instructions for If you are unable to pay your debts.

Read more: Advice and guidance in Finnish and Swedish for debtors in bankruptcy - Office of the Office of Bankruptcy OmbudsmanOpens in a new window.

It is important to take care of your mental and physical coping during and after bankruptcy. Quitting is always a major change that takes time to process.

Do not pay attention to what others may think about you and your situation but 

• accept that your identity may change as a result of bankruptcy
• focus on resting if you feel exhausted
• talk about negative feelings to someone close to you, other entrepreneurs or a professional.
• redirect your thoughts and try to find joy in something new
• when you are ready, consider whether you want to become an employee or have a new business idea in mind.

Even if you do not want to burden your loved ones with your worries, you can still tell them about your feelings and coping. This will help them better understand your situation, help distract you and find joy in new things. You can also think together about the good things the termination has resulted in and what you could do in the future. If your relationships with family members fall into crisis, do not hesitate to seek help.

Talking with other entrepreneurs who have experienced bankruptcy helps you to see your opportunities and identify your feelings.

If you are having health issues due to the bankruptcy, do not wait to contact the services of your wellbeing services county. You can take the first step by taking a test intended to assess your mental health online on the Mentalhub.fi websiteOpens in a new window.. 

Help and peer support:

• Crisis helpline - MIELI ryOpens in a new window.
• Tukinet chat (in Finnish) - MIELI ryOpens in a new window.
• Wellbeing of the entrepreneurs (in Finnish) - MIELI ryOpens in a new window.
• Entrepreneur’s coping guide (in Finnish) - Federation of Finnish EnterprisesOpens in a new window.

If you are a member of an entrepreneur organisation, don’t forget

• peer support groups of Micro and Solo Entrepreneurs’ Association (in Finnish)Opens in a new window.
• networks of the Federation of Finnish EnterprisesOpens in a new window.
• Subsidised leave for entrepreneurs (in Finnish) - Federation of Finnish EnterprisesOpens in a new window.

More information in Suomi.fi:

• Guide on alcohol, drugs and gambling issues
• Help and support for parenthood
• Help for mental health problems
• Guide on divorce or separation

A bankruptcy as such does not prevent you from setting up a new enterprise as long as you have fulfilled your company’s statutory obligations. These include paying taxes and keeping books appropriately.

Although, in principle, you may be able to set up a new enterprise during or after the bankruptcy, in practice it can be challenging:

• the Finnish Tax Administration may prevent your new company from being admitted to the prepayment register
• your payment default entries and your links to a company with payment defaults often complicate practical matters, such as opening a bank account or obtaining a telephone subscription
• access to funding may be difficult
• in trades subject to a licence, such as a restaurant selling alcohol, it may be difficult to obtain the required permits.

If you have been prohibited from engaging in business activities, you cannot set up a new company. A business prohibition may be imposed on you if you have repeatedly and intentionally neglected your statutory obligations or been found guilty of criminal activities. This prohibition may last two to five years.

If you want to set up a new company after bankruptcy, consider what you could do differently this time. Learn about the business planning path and business start-up wizard so that your new company can move in the right direction immediately.

Also read the Company’s financial difficulties and their prevention guide on how to prevent financial difficulties and how to manage payment difficulties.

This website is part of the European Your Europe portal. Give us feedback using the European Commission's feedback form. Opens in a new window.