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Restructuring and insolvency law in Sweden provides a legal framework for handling situations when individuals or companies face serious financial difficulties. The law covers procedures for corporate restructuring, debt adjustment for individuals, bankruptcy, and liquidation. The main aim is to help over-indebted parties recover or, if recovery is not possible, to ensure an orderly and fair distribution of assets among creditors. This legal area is highly regulated and seeks to balance the interests of debtors, creditors, employees, and society as a whole.
You might require a restructuring and insolvency lawyer in Sweden for several reasons. If your business is struggling financially and you are worried about insolvency, a lawyer can help you understand your options, including restructuring and liquidating assets. Companies facing creditor demands, payment defaults, or looming bankruptcy petitions should seek specialized legal advice to protect their interests and comply with Swedish regulations. For individuals, a lawyer can assist with debt restructuring or bankruptcy proceedings. Legal expertise is also vital for creditors seeking to recover debts from insolvent companies or individuals. In all cases, a lawyer will help you navigate complex laws, represent you in court or negotiations, and ensure compliance with procedural deadlines.
Swedish restructuring and insolvency law is primarily governed by several statutes:
Local laws specify priorities among creditors, qualification requirements for starting restructuring, timelines for proceedings, and protections against unfair treatment. Employees enjoy special protections, including priority rights for wage claims. Swedish law also includes cross-border insolvency arrangements in accordance with EU regulations and treaties.
Bankruptcy involves the liquidation of a company's or individual's assets to pay off debts, usually followed by closure. Company restructuring allows a financially troubled business to continue operating under court supervision and negotiate new terms with creditors, with the goal of recovering financial stability.
No, company restructuring (företagsrekonstruktion) is available only to businesses. Individuals can seek debt relief (skuldsanering) if they meet specific criteria.
Employees are given high priority for unpaid wages, and the Swedish wage guarantee system (lönegaranti) can provide payment during bankruptcy or restructuring processes.
Creditors are ranked according to statutory priority. Secured creditors and preferential claims (like employee wages and certain taxes) are paid before unsecured creditors. Any remaining assets are distributed among unsecured claimants.
Once bankruptcy proceedings begin, the debtor loses the right to manage their assets, which are instead controlled by a bankruptcy trustee. All creditor claims must be submitted, and enforcement measures against the debtor's assets are halted.
In exceptional circumstances, bankruptcy can be reversed or annulled if the debtor proves solvency or if the basis for bankruptcy was incorrect.
The duration varies depending on size and complexity, but initial restructuring periods are typically three months and can be extended upon court approval up to a maximum of one year.
A company must demonstrate an acute but likely temporary inability to pay its debts. It must also show that restructuring could potentially yield a better outcome for creditors than bankruptcy.
Yes, foreign creditors may participate in Swedish insolvency proceedings and have similar rights as domestic creditors, subject to EU regulations and local laws.
Directors must comply with their legal obligations during financial distress, including applying for bankruptcy in a timely manner. Failure to do so may result in personal liability for certain financial obligations.
If you require more information or support, consider contacting the following:
If you believe you are facing financial distress, it is important to act quickly. Gather all relevant financial documents and assess your current situation. Contact a qualified restructuring and insolvency lawyer to discuss your options before taking any further action. A legal professional can help you evaluate the best course of action, guide you through the legal process, and represent your interests in dealings with creditors or authorities. Early legal advice minimizes risks and can maximize your chances of a positive outcome. Remember, restructuring and insolvency law is complex, and professional guidance is highly recommended to avoid costly mistakes and ensure all procedural requirements are met.
