Bankruptcy opening

HWhat is a bankruptcy petition?

Every bankruptcy begins with a petition for bankruptcy, compulsory dissolution or compulsory liquidation.

A winding-up petition is submitted to the district court by the company's own board of directors on the basis that the board of directors believes that the company's payment challenges are not of a temporary nature. The company's debt exceeds the value of its assets, and the company is no longer able to fulfil its ongoing obligations.

A bankruptcy petition is submitted to the district court by a creditor due to an unpaid claim. The debtor can be both a company and a private individual. The creditor can, for example, be an employee, a supplier or a bank. However, it is often the Swedish Tax Agency that declares a company or private individual bankrupt. The reason for this is non-payment of VAT, tax, advance tax, employer's national insurance contributions or other public law claims collected by the tax authorities.

Petition for compulsory dissolution and compulsory liquidation filed by the public authorities on the basis of the absence of a board of directors, auditor, submission of annual accounts or completion of a commenced dissolution.

The person who submits a bankruptcy petition is called the bankruptcy petitioner. In the bankruptcy petition, the petitioner must document their unpaid claim and prove that the debtor is insolvent (unable to pay their obligations as they fall due).

The bankruptcy petitioner must provide security for the estate administration up to a maximum of 50 court fees. This amounts to NOK 67,250 in 2026. The amount must be paid to the district court prior to the opening of bankruptcy proceedings. Employees and the company itself are exempt from paying this amount.

If your customer fails to make payments, you may consider whether it is appropriate to file for bankruptcy. Please contact us if you require legal assistance in such a process, or if you are a member of a board that is considering whether the obligation to declare bankruptcy has arisen.

How is a bankruptcy opened?

A judge in one of the country's district courts decides whether a company or private individual should be declared bankrupt. A bankruptcy petition from a creditor means that the bankruptcy petition is dealt with in a court hearing at which both the petitioner and the debtor are obliged to attend. Under certain conditions, bankruptcy can be opened despite the debtor not attending. A bankruptcy petition is not processed in a formal court hearing.

The decision to open bankruptcy will be stated in the court's bankruptcy opening order and includes, among other things;

who is the requisitioner
the basis for the petition
if applicable, the debtor's acknowledgement of inability to pay
the bankruptcy debtor's assets and liabilities.
trustee's name and contact details
the due date of the estate
date of probate meeting
the deadline for submitting claim notifications. See procedure for claim notification here.

If you have objections to the bankruptcy opening - can you appeal?

Anyone affected by the opening of a bankruptcy has the right to appeal the district court's bankruptcy order. The appeal must state what the party believes was wrong with the ruling and prove that the company or private individual was not insolvent. The appeal deadline is 1 month. The appeal must be sent to the district court that opened the bankruptcy. Despite the filed appeal, necessary estate administration will continue to prevent losses until the appeal has been processed.

What are the consequences of going bankrupt?

When bankruptcy is declared, the company's board of directors/management (the bankruptcy debtor personally) loses all right of disposal over its own assets. From the time the bankruptcy is opened, the bankruptcy debtor is not permitted to use, pledge or sell the assets included in the bankruptcy estate's seizure. Nor can a bankruptcy debtor accept fulfilment of outstanding claims or incur obligations to the estate.

However, the bankruptcy debtor is obliged to assist the trustee in the work of, among other things, recovering possible assets. The duty to assist also includes providing or obtaining information about the company's financial circumstances and the business conducted, as well as presenting correspondence, accounting records and other documents of importance to the estate administration.

If the bankruptcy debtor is a company, it is the board of directors (or board members over the past year) that has a duty of assistance.

What happens during an estate administration?

The appointed trustee is responsible for ensuring that a number of investigations and tasks are carried out during the estate administration. The main tasks can be briefly summarised as follows

safeguard the company's assets and review the company's accounts
Investigations to uncover and recover possible assets/irreconcilable/indemnifiable matters
withdraw from any leases and decide on any other agreements
assess criminal offences and bankruptcy quarantine
assess the time of insolvency
If necessary, carry out debt collection and payment of the estate's surplus

What is a probate collection?

A probate meeting is a court hearing in the district court where the judge, trustee and bankruptcy debtor/chairman are obliged to attend in person. The meetings are held by video conference and normally last about 15 minutes.

During the probate meeting, the trustee will briefly review the interim report. The document contains information about the completed estate administration, including what the company has been doing, why it has gone bankrupt, whether assets and liabilities have been uncovered, the sale of any assets and possible criminal offences.

Shift assembly is over - now what?

In some smaller bankruptcy estates, bankruptcy proceedings can be terminated as early as the probate meeting. However, an important prerequisite is that the deadline for filing a claim has expired, and that all necessary steps in the estate have been completed.

If the estate administration was not ready to be finalised, either due to a future deadline or because there is still work to be done in the estate, the estate administration continues after the probate meeting. This may, for example, be due to the fact that various matters have not been clarified, the collection of outstanding debts or other claims is ongoing, or that further investigations must be carried out in relation to possible criminal offences. However, many bankruptcies will be finalised within six months, while some bankruptcies will continue for several years.

What happens after the end of bankruptcy proceedings in a corporate bankruptcy?

After the bankruptcy proceedings have been finalised, a bankrupt company will be deleted. After this, it will not be possible to recover claims against the company and the creditor will have to recognise the claim as a loss. However, if directors' liability can be established for the board of directors of the bankrupt company, outstanding claims may still be honoured after the bankruptcy proceedings have been terminated. It should be noted that such liability for the board of directors is an exceptional rule and requires civil action. If a creditor wishes to initiate such a process, we recommend that the litigation risk is assessed against the size of the claim, the likelihood of success, etc. If your claim is against a company where we are not the trustee, we are happy to assist in the assessments and any litigation.

What happens after the end of bankruptcy proceedings in personal bankruptcy?

If the bankruptcy debtor is a private individual, all remaining debts will continue to exist after the end of the bankruptcy proceedings. The individual creditor can then continue to pursue the debtor if desired.

If the bankruptcy debtor is the owner of a sole proprietorship, it will not be deleted during/after the bankruptcy. In some cases, it will also be financially favourable for both the debtor and the creditors that the business continues during the estate administration. Continued operation is then at the bankruptcy debtor's own expense and risk.