sou · H2B344 · 2014-06-23 00:00:00 — However, so far in we have had a more forgiving attitude towards employees who have become over- indebted as a result of extensive consumption than towards serious entrepreneurs who have taken conscious and objectively justifiable risks in order to realise a business idea and create more jobs. As a result, Swedish entrepreneurs have opportunity, by interna- tional comparison, to have their debts written off after a bank- ruptcy. This approach has brought criticism from the , which found in a report in 2007 that the risks of running a business in need to be limited relative to the risks in comparable countries. Why is it difficult for entrepreneurs to obtain debt restructuring under the ordinary Debt Relief Act? In the preparatory materials for the Debt Relief Act, the legislators emphasised the importance of giving failed entrepreneurs a second chance. So it is paradoxical that natural persons running business operations were previously completely excluded from the scope of the Debt Relief Act. An entrepreneur can now be granted debt restructuring without prior bankruptcy, but only if the financial circumstances of the business are easily analysed. The provision should be seen against the backdrop that debt restructuring is in- tended to be a simple and quick procedure, but in practice the re- sult has been that the door continues to be closed to entrepreneurs wishing to obtain debt restructuring. It has also proved difficult to make an assessment of absolute insolvency con- cerning a person running or intending to start a company, since their future income is often uncertain. a period of just over two years, only 69 entrepreneurs have obtained or will obtain debt restructuring, even though the Swedish Enforcement Authority and the Government both expected the latest legislative amend- ment to result in several thousand sole entrepreneurs having their debts restructured. There is nothing to prevent an entrepreneur from applying for debt restructuring once the business has been declared bankrupt. Debts from previous business activities are normally covered and are even expected to be treated positively in the general assessment of reasonableness. An entrepreneur who obtains employment after the completion of bankruptcy pro- ceedings can therefore normally obtain debt restructuring. In con- trast, a person who wants to start a new business is generally una- ble to obtain debt restructuring as it is often impossible to assess their future ability to pay with any certainty. This system is neither logical nor appropriate. A new act on debt restructuring for entrepreneurs and their family members It should be possible to open the door to debt restructuring for entrepreneurs by amending the Debt Relief Act. However, the legislative authorities have attempted to open the way for entre- preneurs through several amendments, but have failed. Entrepre- neurs are still excluded from the debt restructuring system since it is difficult to make an assessment of absolute insolvency concern- ing them and since the circumstances of their business have to be easy to analyse. We therefore consider that entrepreneurs should be offered debt restructuring through a special act designed to fit their situation. No debt restructuring for non-serious entrepreneurs Around 4–6 per cent of all bankruptcies in the EU are dishonest – yet in general no distinction is made between honest and dishonest bankruptcies. Legislation that embraces honest entrepreneurs but excludes dishonest entrepreneurs will make the dividing line clearer and may increase acceptance of entrepreneurs who are given a sec- ond chance. The new act should therefore only be available to seri- ous entrepreneurs. Debt restructuring should offer serious entre- preneurs a possibility – not a right – to quickly and efficiently tackle their burden of debt and obtain a chance to make a fresh start. It is therefore important that non-serious entrepreneurs are excluded from the new act. To guarantee this, we have made clear demands regarding the debtors conduct. Debt restructuring for entrepreneurs will not be granted if the business has been conduc- ted in an irresponsible , if the reporting and payment of taxes and fees has been mismanaged to a not inconsiderable extent, if the bookkeeping has been neglected or if the entrepreneur is or has been running the business in a manifestly indefensible way. As an additional guarantee against abuse of the system, debt restructuring for entrepreneurs will only be granted if reasonable. This assessment is to include the circumstances surrounding the origin of the debts and the importance of debt restructuring for the debtors future earning capacity. Family members will also be eligible for debt restructuring When an entrepreneur becomes over-indebted, it is not unusual for the entrepreneurs immediate family also to become over-indebted. A spouse or partner may have taken out a loan to save the business or to contribute to the familys means of support. It is also common for creditors to demand guarantees from family members for granting the entrepreneur credit. A family member can often be granted debt restructuring under the ordinary rules. But if the en- trepreneur is given the benefit of debt restructuring with a shorter but tougher payment period, the entrepreneurs family should also be given the same opportunity. We therefore propose that family members of entrepreneurs be covered by the new act if business debts are concerned. The concept of family members must be narrowly defined and only include spouse, partner, child and parent. Since debt restructuring for entrepreneurs is intended as a pos- sibility aimed at giving serious entrepreneurs a second chance and sending a signal to serious entrepreneurs that the risks of entrepre- neurship are manageable, family members can only obtain debt restructuring if the debts stem from a serious enterprise. In other words, non-serious conduct on the part of the entrepreneur will also rub off on blameless family members. Debt restructuring for entrepreneurs must be quick and efficient We therefore propose a new form of debt restructuring for serious entrepreneurs. This kind of debt restructuring will be a means of partly relieving the entrepreneur of responsibility for debt payment and giving them a second chance. As a result, prospective entrepre- neurs will perceive the risks of entrepreneurship as manageable. It is important that debt restructuring has a forward-looking per- spective and genuinely contributes to improving the entrepreneurs of future success. Shorter payment period with tougher instalments The new form of debt restructuring is primarily intended for or former entrepreneurs who plan to return to professional life as an entrepreneur. To achieve the purpose of a special form of debt restructuring for entrepreneurs – to enable the entrepreneur to make a fresh start and contribute to economic growth – it is im- portant that the entrepreneur can quickly tackle the burden of debt and that the payment period is short. However, the payment pe- riod must not be so short as to undermine respect for contracts entered into. It could be felt to be objectionable if the entrepreneur could be relieved of the liability to pay without having paid any- thing during the payment period, as can be the case in ordinary debt restructuring. Instead, we propose a relatively short but tough payment period. We have settled on a payment period of three years, which is in line with the recommendation recently adopted by Commission. The payment period in ordinary debt restructuring is five years. The shorter payment period for entrepreneurs is moti- vated not only by the need to reduce risks for entrepreneurs but also by the fact that entrepreneurs will face considerably tougher terms of payment than under the Debt Relief Act. No payment- free months should be introduced for entrepreneurs, even if this does happen in ordinary debt restructuring in accordance with the proposal of the 2012 Debt Relief Inquiry. An entrepreneur whose debts are to be restructured must pay the creditors at least 000 per quarter. The entrepreneur must also actively present her or his debt situation and earning potential, and show how the en- terprise has been run, whereas in ordinary debt restructuring the Swedish Enforcement Authority takes care of parts of the investi- gation. To further speed up the process of writing off the debtors debts and create an efficient debt restructuring procedure, we pro- pose, like the 2012 Debt Relief Inquiry, that the debtor begin making payments as soon as the initiating decision has been made. Debt restructuring for entrepreneurs can be granted even though the debtors financial circumstances are uncertain One of the reasons why it is difficult for entrepreneurs to obtain debt restructuring under current regulations is that the entrepre- neurs future income is often uncertain. The absolute insolvency requirement will not be changed relative to what applies to other natural persons. However, in the new form of debt restructuring, the Swedish Enforcement Authority must estimate the entrepre- neurs future income, partly so as to determine whether the entre- preneur is absolutely insolvent and partly to determine her or his capacity to pay. Here, a guideline may facilitate assessment. If the debtor would be unable to pay her or his debts within the foreseea- ble future even if her or his income were to double, it is reasonable to regard the debtor as absolutely insolvent. And where the ability to pay is concerned, great weight should be given to the debtors own assessment. If the entrepreneur judges that her or his new business operation will permit income withdrawals that enable the entrepreneur to keep up with the payments envisaged in the pay- ment plan, this should be accepted unless it appears to be an obvi- ous misjudgement. If the entrepreneur is serious and otherwise fulfils the requirements for debt restructuring, the entrepreneur should therefore be given a chance to try to become free of debt even if the entrepreneurs future income is not entirely certain. In ordinary debt restructuring, the debtor normally pays a certain amount every month. entrepreneurs often have irregular incomes. Terms of payment differ in different sectors and an en- trepreneur who has 90-day terms of payment will have difficulty managing monthly payments, particularly during a start-up phase. The general rule should therefore be that the debtor is to pay on a quarterly basis, but both monthly and twice-yearly payments should also be possible where appropriate. From bankruptcy to debt restructuring for entrepreneurs Most entrepreneurs who will apply for debt restructuring for entrepreneurs will either personally have been declared bankrupt or have run their business operation in a company that has been de- clared bankrupt. To reach these entrepreneurs, the court in the bankruptcy case should inform the debtor, or its representative if the debtor is a legal person, about the possibility of applying for debt restructuring. The inventory of the estate in bankruptcy and the receivers statements concerning the entrepreneurs conduct can have a considerable influence on the assessment of the debt restructuring case. However, prior bankruptcy should not be required to qualify for debt restructuring for entrepreneurs. The institution of bankruptcy will continue to take precedence over the institution of debt restructuring, which means, among other things, that debt restructuring for entrepreneurs cannot be initiated during the debtors personal bankruptcy. To ensure that debt restructuring for entrepreneurs is only available to honest and responsible entrepreneurs, the debtor should not be protected from bankruptcy before the decision on debt restructuring for entrepreneurs has become final and non-appealable. This will give the debtors creditors the possibility of having the debtor declared bankrupt if there is any suspicion that recoverable transactions or other forms of unfair conduct have occurred, or if a bankruptcy could yield a more favourable outcome for the creditors for some other reason. Debt restructuring for entrepreneurs should be possible without bankruptcy Even if a business operation is usually wound up by bankruptcy, a business can be wound up in other ways as well, for example by deregistering an unincorporated business. To avoid the risk of debt restructuring for entrepreneurs encouraging bankruptcy, en- trepreneurs who have wound up their business in some other way than bankruptcy should also come under the regulations. Debt restructuring for entrepreneurs should also be available to debtors who are running an ongoing business operation. If an ac- tive entrepreneur is over-indebted because of old debts (e.g. from having sold real estate at a loss), in the current system he or she is generally prevented from obtaining debt restructuring unless the business is wound up. It is not reasonable to have legislation that forces an entrepreneur to wind up a business that works and is beneficial to society in order to obtain debt restructuring. How- ever, for an entrepreneur to be granted debt restructuring for entrepreneurs, the business must be sound and function well. The business must therefore be able to pay taxes and other liabilities at the proper time. An entrepreneur who runs a business that is making a loss and that therefore repeatedly incurs new debts should not be covered by the system. Debt restructuring can be cancelled or changed It goes without saying that the debtor must be able to depend on debt restructuring for entrepreneurs being a permanent decision that cannot be torn up. But as pointed out, debt restructuring for entrepreneurs is intended as a possibility – not a right – for serious entrepreneurs. If the entrepreneur has engaged in irresponsible conduct, e.g. by giving incorrect information, and should therefore never have obtained the benefit of debt restructuring, the decision should normally be cancelled. The same applies if the entrepreneur does not follow the payment plan. If the debtors financial position substantially improves during the payment period, the creditors should benefit from this im- provement. The amount that the debtor is to pay the creditors should then be raised. If the probably very unusual situation should arise that the debtor goes from being over-indebted to being rich within a few years, the debt restructuring can be cancelled with the effect that the debtor once again becomes fully liable for all her or his debts. This requires the debtors financial position to have im- proved to such an extent that he or she can pay all the debts with- out foregoing a reasonable standard of living. Another condition is that a creditor applies for this within five years of the decision to initiate debt restructuring for entrepreneurs. If the debtors financial position deteriorates, in exceptional cases the debtor can apply for a change in the payment plan for the later part of the payment period. Economic consequences of the proposals there be a change in payment behaviour? It is important that we keep a high standard of payment behaviour in both business and private life. Business relations and trade bene- fit if actors are confident that contracts will be kept and invoices paid, and this is also crucial to the smooth functioning of society and a high degree of social trust. But trust must be mutual. When a serious entrepreneur, through no fault of their own, has become unable to pay their debts, the creditors and society should be able to share the responsibility with the debtor. Since debt restructuring for entrepreneurs will only be available to responsible and serious entrepreneurs, our assessment is that the legislation will not ad- versely affect the general standard of payment behaviour. there be a change in the granting of credit? One argument for the previous restrictive approach to offering entrepreneurs the possibility of debt restructuring was the risk of negative consequences for the granting of credit. The new form of debt restructuring, however, will only apply to a limited circle of debtors. Most of these debtors will have gone through bankruptcy procedures, either in person or through their business, and for this reason their debts must in any case appear highly uncertain from the lenders perspective, at least in the short term. The actual finan- cial consequences for creditors should therefore be extremely lim- ited. In addition, part of the personal risk-taking remains with the entrepreneur due to the requirement that the entrepreneur must always pay a certain proportion of her or his debts. In light of this, there appears to be risk that the new form of debt restructur- ing will lead to rising credit costs and poorer access to credit. This conclusion is supported by the assessment that Professor , , and Associate Professor , , have arrived at in their analysis of the proposals consequences for the granting of credit. Proposal will benefit economic growth A number of empirical studies have focused on the importance of new enterprises for economic growth. They can be summed up by stating that the majority of the studies conducted show a positive link between new enterprises and economic growth. for Growth Policy Analysis has been commissioned by the Inquiry to analyse the consequences of the proposal for new enterprises and growth and has concluded that relaxing the insolvency legislation will probably favour better, not just more, entrepreneurship. To put it another way, the proposal can be expected to benefit entrepreneurship that has an explicit to grow and that in the longer perspective will create jobs and contribute to increased economic growth. A narrow field of application with great symbolic value Based on the experiences of the Danish system, we estimate that approximately 800 over-indebted entrepreneurs per year will be granted debt restructuring for entrepreneurs. Even if this figure is no more than a rough estimate, the regulations will therefore have a narrow field of application. At the same time, the regulations may be absolutely vital to the individual entrepreneurs who qualify, as they will offer them a chance of a fresh start after a failed business venture. Moreover, the act will have considerable symbolic value by sending a signal to prospective and existing entrepreneurs that the risk involved in serious business is being reduced, and this in turn will have a positive impact on growth. Regulations that open the way to a quick and efficient writing off of debts for seri- ous entrepreneurs plug a gap in the Swedish system of insolvency law and are also in line with the current EU work on insolvency law. lag (20xx:xxx) om skuldsanering för företagare och närstående till företagare Härigenom föreskrivs följande. 1 § Denna lag innehåller bestämmelser om skuldsanering för före- tagare och närstående till företagare (). 2 § I lagen avses med näringsverksamhet: verksamhet som är av ekonomisk natur och av sådan karaktär att den kan betecknas som yrkesmässig, företagare: en fysisk person som driver eller har drivit närings- verksamhet, närstående: make, sambo, barn eller förälder. 3 § F-skuldsanering innebär att en gäldenär delvis befrias från ansvar för betalningen av de skulder som omfattas av F-skuld- saneringen. Om ackord, konkurs och skuldsanering finns särskilda be- stämmelser. 4 § prövar ärenden om F-skuldsanering och omprövning av ett beslut om F-skuldsanering. 5§ F-skuldsanering får beviljas 1.en företagare vars näringsverksamhet har avvecklats genom en konkurs eller på annat sätt, om hans eller hennes skuldbörda till huvudsaklig del har uppkommit i näringsverksamheten, 2.en företagare som driver näringsverksamhet, om skulder som uppkommer i denna rätteligen kan betalas, och 3.en närstående till en företagare, om den närståendes skuld- börda till huvudsaklig del har uppkommit i företagarens närings- verksamhet. 6§ F-skuldsanering får endast beviljas en person som har hemvist i . Den som är folkbokförd i ska anses ha hemvist i . 7§ F-skuldsanering får endast beviljas om gäldenären är kvalificerat insolvent. Med kvalificerad insolvens avses att gäldenären inte kan rätte- ligen betala sina skulder och att denna oförmåga med hänsyn till samtliga omständigheter kan antas bestå . En bedömning av gäldenärens betalningsförmåga ska göras även om gäldenärens framtida inkomstförhållanden är oklara. 8§ F-skuldsanering får inte beviljas om 1.företagaren i sin näringsverksamhet missköter eller har misskött sina förpliktelser avseende bokföring, skatteavdrag, anmälan om F-skatt eller betalning av skatt eller avgift i en om- fattning som inte är ringa, 2.företagaren driver eller har drivit sin näringsverksamhet på ett uppenbart oförsvarligt sätt, 3.gäldenären saknar eller endast har ett ringa betalnings- utrymme, eller 4.gäldenären är ålagd näringsförbud enligt lagen (1986:436) om näringsförbud. 9§ En gäldenär som har fullgjort en skuldsanering eller en F-skuldsanering, får beviljas F-skuldsanering endast om det finns synnerliga skäl. 10 § F-skuldsanering får endast beviljas om det är skäligt med hän- syn till gäldenärens personliga och ekonomiska förhållanden. Vid tillämpningen av första stycket ska särskilt beaktas om- ständigheterna vid skuldernas tillkomst, de ansträngningar gälde- nären har gjort för att fullgöra sina förpliktelser och F-skuld- saneringens betydelse för gäldenärens framtida förvärvsförmåga. 11 § En F-skuldsanering omfattar, om inte annat föreskrivs i denna lag, alla fordringar på pengar mot gäldenären som har uppkommit före den dag då beslut meddelas enligt 23 § att inleda F- skuldsanering (inledandebeslut). En F-skuldsanering medför att rätten till ränta eller dröjsmålsavgift på en sådan fordran bortfaller för tiden efter nämnda dag. Vid en F-skuldsanering får det bestämmas att en fordran som avses i första stycket och som är beroende av villkor, inte är till beloppet fastställd eller inte är förfallen till betalning ska undantas från F-skuldsaneringen. I fråga om en sådan fordran får borgenären utan hinder av föreskrifter i annan författning bevilja anstånd med betalningen betalningsplanen enligt 14 § löper. Om en fordran som har anmälts enligt 25 § kan antas vara uppenbart ogrundad, får det bestämmas att denna fordran ska undantas från F-skuldsaneringen. 12 § En F-skuldsanering omfattar inte 1.en fordran på familjerättsliga underhåll, 2.en fordran för vilken borgenären har förmånsrätt enligt 5 § förmånsrättslagen (1970:979), till den del säkerheten räcker till för betalning av fordran, 3.en fordran för vilken borgenären har panträtt eller annan förmånsrätt enligt 6 eller 7 § förmånsrättslagen (1970:979) eller retentionsrätt, till den del säkerheten räcker till för betalning av fordran, 4.en fordran för vilken borgenären, innan inledandebeslut har meddelats, har fått förmånsrätt enligt 8 § förmånsrättslagen, när det gäller egendom som har tagits i anspråk vid verkställigheten, 5.en fordran som inte är förfallen till betalning och som är beroende av att borgenären tillhandahåller en motprestation, eller 6.en fordran som är tvistig. Bestämmelsen i första stycket 1 gäller inte när eller ett utländskt offentligt organ har inträtt i den underhålls- berättigades rätt till underhållsbidrag. Innehållet i en F-skuldsanering 13 § Alla fordringar som enligt 11 § omfattas av F-skuldsaneringen har lika rätt. Utan hinder av första stycket får en fordran 1.ges sämre rätt, om borgenären samtycker, eller 2.betalas före andra fordringar, om den efter fördelning enligt 14 § första stycket avser ett mindre belopp och det är skäligt med hänsyn till omfattningen av skulderna och övriga omständigheter. I 34 § finns bestämmelser om vad som ska gälla i fråga om fordringar som inte har anmälts i ärendet.