§ 18. Bankruptcy, debt negotiation and estate administration interrupt limitation
Limitation (foreldelse) is interrupted if you file for bankruptcy (konkurs) or public administration of an estate (offentlig skifte). If the debtor's (skyldner) estate is already in bankruptcy, debt negotiation (gjeldsforhandling), public administration of an estate or a debt settlement scheme (gjeldsordning), limitation is interrupted when you file your claim (krav) with the estate or with the enforcement officer (namsmannen). Claims filed before the deadline for filing claims (meldefrist) are treated as interrupted from the day the case was opened.
Machine-translated from Norwegian. The Norwegian text is the one that applies. Read the original in Norwegian.Norsk English العربية Polski Українська
The text of the law (unofficial translation)
1. When the creditor (fordringshaver) files for bankruptcy or public administration of an estate, limitation of his claim (fordring) is thereby interrupted.
2. If the debtor's estate is in bankruptcy, debt negotiation under the Bankruptcy Act (konkursloven), public administration of an estate, or if debt negotiation has been opened under the Debt Settlement Act (gjeldsordningsloven), limitation is otherwise interrupted when the creditor files the claim with the estate or with the enforcement authority. Limitation of all claims filed before the expiry of the deadline for filing claims with the estate is deemed interrupted on the day the bankruptcy, debt negotiation under the Bankruptcy Act or the Debt Settlement Act, or public administration of an estate was opened.
3. The interruption also has effect in relation to the debtor and his heirs (arvinger).
What does this mean?
§ 18 is about what happens to limitation when the debtor is in a formal financial process. It may be bankruptcy. It may be debt negotiation. It may be public administration of an estate. It may also be a debt settlement scheme.
Bankruptcy means that the debtor cannot pay what he owes, and that the estate is dealt with under the bankruptcy rules. Debt negotiation means a process in which the debtor tries to reach an arrangement with the creditors (kreditorene). Public administration of an estate means that an estate, often an estate of the deceased (dødsbo), is administered publicly. A debt settlement scheme is an arrangement for private individuals with serious debt problems.
When such processes start, the creditors must file their claims. If you have a claim against the debtor, you must not just sit back. You must file the claim with the estate or with the correct authority. § 18 says that this can interrupt limitation.
The first paragraph applies when you yourself file for bankruptcy or public administration of an estate. If you as a creditor file for bankruptcy, limitation of your claim is interrupted. The same applies if you file for public administration of an estate. This makes sense. You have taken a clear formal step to pursue the claim.
The second paragraph applies when the process is already under way. If the debtor's estate is in bankruptcy, debt negotiation or public administration of an estate, limitation is interrupted when you file the claim. Filing the claim means submitting it to the estate. In debt settlement scheme cases, it may be to the enforcement officer.
The most important part of the second paragraph is the last sentence. If you file the claim before the deadline for filing claims, limitation is treated as interrupted from the day the bankruptcy, debt negotiation, debt settlement scheme or public administration of the estate was opened. This can be very important. In other words, you do not just get an interruption from the day you sent in the claim. If you file before the deadline, the interruption can be counted back to the opening day.
The third paragraph says that the interruption also has effect against the debtor and the heirs. This means that the interruption does not only apply within the estate. It can also matter in relation to the person himself and the heirs, if the matter later becomes relevant there.
What must you do if the debtor goes bankrupt?
You must file the claim before the deadline. The bankruptcy estate (konkursbo) often sends out information about the deadline for filing claims. It may also be publicly announced. You must read the letter or the announcement carefully. It states where the claim should be sent, which deadline applies, and which documentation should be attached.
If you do not file the claim, you may lose the opportunity to receive payment from the estate. You may also run into problems with limitation. § 18 protects you when you file the claim correctly, but it does not help if you merely know about the bankruptcy and do nothing.
The claim should be filed in writing. State the amount. State what the claim is based on. Attach documentation. This may be an invoice (faktura), loan agreement (låneavtale), judgment (dom), Conciliation Board judgment (forliksrådsdom), bank statement, purchase contract or other documentation. If the claim carries interest (renter), you should show how the interest has been calculated.
You should also ask for confirmation of receipt. If the deadline is later disputed, you need proof that the claim was filed in time. So do not just give a verbal message. Do not rely on the estate administrator (bostyrer) "surely knowing about the matter". The claim must be filed.
If you file before the deadline for filing claims, you get an important advantage. Limitation is deemed interrupted from the day the bankruptcy was opened. This can save claims that were otherwise close to becoming time-barred.
What if you file for bankruptcy yourself?
If you as a creditor file for bankruptcy, limitation of your claim is interrupted under the first paragraph. This means that the bankruptcy petition is a step that interrupts the limitation period.
But a bankruptcy petition is a serious step. It is not just a payment reminder (purring). You must have grounds to file for bankruptcy. The debtor must be insolvent, that is, unable to pay his debts as they fall due, and the payment problems must not be merely temporary. In practice, bankruptcy is often used when the debtor is in default on payments and ordinary collection is not working.
You should not file for bankruptcy just to "scare" the debtor. But if the conditions are met, it can be both a way of pursuing the claim and a way of interrupting limitation.
If the bankruptcy petition is not granted, you must look at § 22. It contains rules on an additional time limit (tilleggsfrist) when a bankruptcy petition does not succeed. You may have 1 year after the decision, but you must not wait without checking.
What does public administration of an estate mean?
Public administration of an estate means that an estate is administered by the court or with public involvement, instead of the heirs doing everything privately. This may be relevant for an estate of the deceased, joint marital property after a marriage or other estate settlements. In the Limitation Act § 18, the point is that claims against the estate must be filed in the process.
If you have a claim against a person who has died, and the estate is publicly administered, you must follow the rules for filing claims. If you file before the deadline, limitation can be interrupted under § 18. This can be decisive if the claim is old.
Public administration of an estate must also be seen together with a public notice to creditors (proklama) under § 13. A public notice to creditors is a public call to creditors. If there is a public notice to creditors, you must meet the deadline set there. For public administration of an estate, § 13 further refers to § 18, § 21 and § 22.
This may seem technical, but the advice is simple: when an estate is being administered publicly, you must file the claim in writing with the correct recipient before the deadline.
What does a debt settlement scheme mean?
A debt settlement scheme is an arrangement for private individuals with serious debt problems. It is handled through the enforcement officer and the court. If the debtor gets a debt settlement scheme, the creditors must file their claims.
Under § 18, limitation is interrupted when you file the claim with the enforcement officer in a debt settlement scheme case. If you file the claim before the deadline for filing claims, limitation is deemed interrupted from the day the debt negotiation under the Debt Settlement Act was opened.
This is important because debt settlement scheme cases can take time. You do not want the claim to become time-barred while the case is being processed. But you must file the claim. If you do not, the debt settlement scheme can have major consequences for your claim.
What happens if you make a mistake?
If you do not file the claim with the bankruptcy estate or in the debt settlement scheme, you may end up without payment. You may also lose the interruption of the limitation period (fristavbrudd) you could have obtained under § 18.
If you file too late, the situation can become more uncertain. The estate may reject the claim as filed too late. The effect on limitation may also be less favourable than if you had filed before the deadline.
If the bankruptcy or the estate administration ends without the claim being paid, this does not mean you are done with limitation. You must then look at the rules on a new limitation period in § 21 and the additional time limit in § 22. Many people lose track after the estate has been dealt with. That can be costly.
Examples
Kari has an unpaid invoice of NOK 55,000 against a sole proprietorship. The deadline is approaching. Before Kari has time to send a complaint to the Conciliation Board (forliksklage), bankruptcy proceedings are opened against the debtor. Kari receives a letter from the estate administrator with a deadline for filing claims. Kari files the claim before the deadline and attaches the invoice, the agreement and the payment reminders. Under § 18, limitation is interrupted when she files the claim with the estate. Because she files before the deadline for filing claims, the interruption is deemed to apply from the day the bankruptcy was opened. Kari should keep the confirmation from the estate administrator. If the bankruptcy estate is later closed without full payment, she must look at § 21 and § 22 to see what happens with a new limitation period.
Ola lent NOK 100,000 to a friend. The friend dies. The estate goes into public administration, and a call to creditors is issued. Ola thinks that the heirs surely know about the loan, because the loan agreement was among the deceased's papers. That is risky. Ola must file the claim. If he files before the deadline, limitation can be interrupted under § 18. If he does not file the claim, he may both lose the opportunity to receive payment and run into problems with limitation. Ola should send the loan agreement, a bank statement and a short explanation to the correct recipient.
Common mistakes
- Not filing the claim because the estate "surely knows about it"
- Sending the claim after the deadline for filing claims
- Not attaching documentation
- Believing that bankruptcy automatically saves all claims without you doing anything
- Forgetting to follow up after the estate is closed
What should you do?
When you receive notice of a bankruptcy, debt settlement scheme or estate administration, find the deadline for filing claims straight away. Put the deadline in your calendar. File the claim in writing in good time.
Write the claim clearly. Include the amount, the basis, interest and documentation. Send it to the correct recipient. Ask for confirmation of receipt.
When the case is closed, ask for information about the outcome. Did you receive payment? Was the claim accepted? Was it rejected? When was the case closed? You need these answers to calculate further deadlines.