Bill on Payment Adjustment Passed in Iceland Skip to content

Bill on Payment Adjustment Passed in Iceland

Iceland’s Althingi parliament passed on Monday a bill presented by Minister of Justice Ragna Árnadóttir on payment adjustment because of the economic crisis.

Claims held by the Housing Financing Fund (HFF) and state-owned financial companies that are insured with collateral in private housing used as living quarters in Iceland can now be amended, Fréttabladid reports.

Amendments include increasing the number of payment dates, postponing payments for a limited period of time, a new credit period and the rescheduling of defaults.

The part of debts that exceeds the worth of a property can be taken in for contract claims. This resource will henceforth be known as payment adjustment instead of debt relief.

According to Fréttabladid, the Ministry of Finance estimates that 100 to 200 individuals will take advantage of the new legislation based on the number of bankruptcy rulings in 2006-2007.

It is doubted that the estimate is realistic; it is likely that many more individuals require payment adjustment. Ása Ólafsdóttir, assistant to Minister of Justice Ragna Árnadóttir, said close attention will be paid to developments.

“But I want to stress that those who apply for this resource have to be, and will be in the near future, incapable of living up to their obligations,” Ólafsdóttir added.

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