§ 4-2. What a voluntary debt settlement proposal can and must contain

This section says what a debt settlement proposal (forslag til gjeldsordning) for a voluntary debt settlement (frivillig gjeldsordning) can involve, and what it must contain. The debtor can propose deferred payment, that the creditors (those who are owed money) give up interest and costs, or that all or part of the debt is written off. Several of the solutions can be combined. The period is normally five years, counted from the day the debt negotiations were opened.

In practice, the proposal must have a fixed amount that is paid to the creditors on each payment date (payment deadline), and the amount must stay fixed throughout the period. It can be changed under the rules in chapter 6. The main rule of a fixed amount can also be departed from if the ability to pay is expected to change more than usual, or if it is particularly appropriate for other reasons. The proposal must be easy for the creditors to check, so that they can see whether the terms are being complied with.

Two further requirements always apply. The proposal must state what is to apply to co-debtors, that is, others who are liable for the same debt. And it must be based on a realistic assessment of what the debtor can actually pay. Example: The debtor sees that their income will probably rise a lot in the next few years. The proposal can then depart from the main rule of a fixed amount, because the ability to pay is expected to change more than usual.

The section is closely linked to the neighbouring provisions. How much there is to pay with depends on what the debtor may keep of their income under § 4-3. The money is then divided among the creditors under § 4-8. The section is also used elsewhere in the Act: § 5-2 on the content of a compulsory debt settlement (tvungen gjeldsordning) refers to it, as does § 2-2 on the enforcement officer's (namsfogdens) duty to provide guidance.