Recovering from bankruptcy

Bankruptcy may cause feelings of shame, although usually there is no reason to feel such way – bankruptcy is rather the beginning of something new. Learn from the bankruptcy, talk with people to make you feel better and continue your life with a positive mind. Do not hesitate to seek help for your financial difficulties, health issues and other difficulties.

You can also continue as an entrepreneur after bankruptcy by setting up a new company.

After the bankruptcy, your income will usually decrease, as you will no longer receive a pay from your company.
Bankruptcy may leave you with major debts.
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 in the credit register makes it more difficult to obtain a loan or a credit card. 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.

Talk about your feelings to your family and friends, other entrepreneurs or seek professional help.
Do not pay attention to what others may think about you and your situation.
Remember that life will go on even after bankruptcy.
Redirect your thoughts and try to find joy in something new.
Think about what good things bankruptcy brought to your life and consider it as the beginning of something new.

Accept that your identity may change as a result of bankruptcy. Take it in a positive way: you can be whatever you want to be. Be proud that you dared to be an entrepreneur and were able to employ yourself and possibly offer employment to others as well.

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 proper accounting arrangements.

However, 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.

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 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.

Text edited by: Suomi.fi editorial team

Updated: 21/12/2023

Recovering from bankruptcy

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