§ 1-2. Who does the Debt Settlement Act apply to?

This section decides who the Act applies to. The first subsection says that only private individuals can get a debt settlement. Companies and others who are not natural persons are therefore outside its scope. If you have debt from your own business activity, the main rule is that you are not covered by the Act either.

There are two exceptions. The first applies when the business has ended and there are no unresolved matters left that would make the negotiation itself difficult to carry out. The second applies when the business debt is only a relatively small part of all your debt. Here is a constructed example: the debtor has closed down their business, and there are no disputes or unsettled claims left. In that case, the business debt does not stand in the way. If the debtor is still running the business, and the business debt makes up the bulk of the debt, he or she falls outside the Act.

The second subsection governs the relationship to bankruptcy. If your estate is already being administered under the Bankruptcy Act, debt negotiation cannot be opened. Conversely, an opened debt negotiation does not prevent bankruptcy from being opened in the estate. If bankruptcy comes, the debt settlement case shall be dismissed, that is, ended. Bankruptcy therefore takes precedence.

This section must be read together with the rest of Chapter 1. The purpose in § 1-1 is to help people with serious debt problems. The condition that you must be permanently unable to pay is in § 1-3, and the circumstances in which debt negotiation shall be refused are in § 1-4. Even if you fall within the scope here, you must therefore still meet those conditions. Later in the Act, § 2-6 (the enforcement officer's (namsfogden) authority to reject applications (søknader)), § 3-1 (opening of debt negotiation) and § 5-4 (confirmation by the court (stadfestelse) by the district court (tingretten)) are linked to this section, so the scope can matter both early and late in a case.