Applications for bankruptcy from creditors

If a customer owes you money, or you are employed and have not received salary or holiday pay from your employer, you might have to declare the debtor bankrupt. Before you can petition for bankruptcy, you have to attempt other means of debt collection.

Creditors or employees can petition for bankruptcy of a debtor. The petitioner must pay a guarantee for the expenses of the bankruptcy proceedings. However, employees are exempt from the duty to pay a guarantee. 

Below is a description of the process of petitioning for bankruptcy.

Before petitioning for bankruptcy, creditors will normally attempt to collect debts through reminders and debt collection procedures. A creditor's last resort before petitioning for bankruptcy will often be distrainment. An enforcement officer carries out distrainment proceedings. The aim is to determine whether the debtor has any assets that can be seized.

  • If this process is unsuccessful, creditors must consider whether it is appropriate to petition for bankruptcy. The key issue here is whether the debtor has any assets that can be realised. If a creditor is unsure whether the debtor has any assets, the creditor risks having to pay the cost of the estate administration.
  • Enclosed with the petition for bankruptcy, the creditor must enclose the results of the distrainment and copies of fees that have been paid and a certification of incorporation.
  • At the same time as a creditor submits a petition for bankruptcy, he must pay a fee to cover the associated expenses. If it becomes apparent that the debtor has sufficient liquid assets to cover the expenses, the amount will be refunded.
  • An employee who has not received salary and holiday pay from their employer by the agreed date can opt to petition for their employer to be declared bankrupt in order to recover what they are owed. However, before petitioning for bankruptcy the employee has to send a payment demand and a bankruptcy notice. Employees who petition for bankruptcy are exempt from the obligation to pay the expenses for the estate administration.

    Guide for employees on petition to institute bankruptcy proceedings against the employer (in Norwegian only)

  • In addition to the bankruptcy petition to the district court, the employee must enclose documentation that a demand for the debt to be repaid has been submitted to the employer, along with the bankruptcy notice, certificate of incorporation and a copy of the employment contract or a payslip.
  • If bankruptcy proceedings is instituted, the Wage Guarantee Scheme will cover, among other things, outstanding salaries and holiday pay, and salary for the first 30 days following the initiation of the bankruptcy proceedings.

Bankruptcy Act (in Norwegian only)

Bankruptcy Act on conditions for bankruptcy (in Norwegian only)

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