Part I: Debt Adjustment in Finland

Looking back to 2021, when I first applied for debt adjustment, I thought this moment would never come. It seemed eons away. But here we are: August 2025, and it’s finally over. I could pinch myself. Anybody who has been through this hell knows what I mean. The financial struggle, the constant pressure, the toll on your health and peace of mind… it’s relentless. Somewhere along the way, I lost mine.

Debt adjustment took everything from me. At times, I felt paralyzed, like my brain had shut down. I couldn’t create. I couldn’t think. Every day was an exhausting cycle of anxiety, depression, and anger. Only when the program ended did I finally feel free—as if a massive weight had been lifted from my shoulders.

That’s why I’m writing this. This is Part 1 of a three-part series where I’ll break down the financial, emotional, and physical toll of debt adjustment, known as yksityinen velkajärjestely in Finnish —and why Finland desperately needs reform.

FINANCIAL HELL: A SYSTEM STUCK IN THE PAST

In 2022, here’s what the Ministry of Justice says you need per month :

- A single adult or single parent: €552
- A married/cohabiting adult: €465
- Two oldest children under 17: €355 each
- Additional children under 17: €331 each
- Children 17+: €392 each

In my case, living with my partner and two children half the time, we were allocated €930 for all basic living expenses—my share was €465. According to the Ministry, this should cover food, clothing, healthcare, hobbies, transport, and more for a family of four.

Where do these numbers come from?

Statistics Finland publishes the Cost-of-Living Index based on a basket of goods. Kela translates this into the National Pensions Index. The Ministry of Justice then uses the previous year’s index to calculate allowances.

The result: calculations that are always outdated. My program, approved in 2022, was based on 2021 figures—just as food and electricity costs skyrocketed. In 2022, electricity rose 40%. In 2023, food and drink were up 16.3% from the year before. Meanwhile, my family's allowance stayed frozen at €930.

To see how unrealistic this is, I wanted to compare to the University of Helsinki’s report “What Does It Cost to Live?”, which calculates a reasonable minimum budget for families. These budgets are not luxuries—they’re based on what ordinary Finns agreed was the bare minimum for dignity. For a family with two children, the 2021 reference budget was €1,442 per month. By 2024, their reference budget had risen to €1,710—an 18.6% increase.

In the same period, the Ministry of Justice’s official allowance for a cohabiting adult increased from €465 to €602 (+29.5%). On paper, that looks generous. In reality, it was meaningless for me—because my program, approved in 2022, was locked to the 2021 level. They expected me to live on that, not taking into account how the price of living had increased drastically in real life. Of course, I saw through the absurdity of it all and applied for a change in my program a few years later. Imagine those who don't have the energy to go through another bureaucratic hassle, more documents, more waiting as a judge goes over your application.

Even the Ministry of Justice has admitted the principle is wrong. In its 2021 report Amending Debt Adjustment: A Fresh Start for Entrepreneurs and Improving Debtors’ Position, the department stated clearly that a decent monthly amount should be reserved for the debtor’s livelihood, and that the system should not drive people into social assistance or new debt.

Yet that is exactly what happens.

On paper, the system looks tidy. In reality, it crumbles. My electric heating bills alone swallowed the whole allowance. By the time Finland passed emergency relief in 2023, many families were already drowning. And if your bills were already overdue, you didn’t qualify. The policy lagged far behind reality.

Furthermore, debt adjustment carries a strict condition: you may not acquire any new debt.

But the law says nothing about your spouse. In 2022-2023, when our electricity bills suddenly increased from under €500 a month to €1500, my spouse was forced to take on debt. The law only looks at the debtor, but in real life, it drags the whole family down.

The hypocrisy runs deeper. Debt adjustment isn’t just about numbers — it rewrites your entire economic status.

Numbers are only the start. Debt adjustment bleeds into every corner of your economic life, blocking access to housing, electricity, even a phone subscription.

In Finland, entering debt adjustment means automatically losing your credit record, known as luottotiedot in Finnish.

That one mark has devastating consequences.

It doesn’t just affect loans or credit cards. It locks you out of renting a flat, signing an electricity contract, or even getting a phone subscription. Landlords check your credit. Utility companies check your credit. Suddenly, the most basic parts of daily life are off-limits.

For me, this meant that finding housing became nearly impossible. When I finally did, let’s say it was at a stark contrast to the type of housing my family was used to.

While the debtor is living in cuffs, why must the children be chained up as well?

This is one of the greatest shortcomings of the system: it does not consider the person in debt adjustment might have a family to support, and where in the law does it say that family members should be punished as well?

The system reduces you from a functioning member of society to someone who must constantly prove they’re not a risk, even though the court has already approved a strict payment plan to make things right.

It doesn’t have to be this way.

In the United States, for example, a bankruptcy filing stays on your credit report, but it does not completely block you from housing or utilities. You may face higher deposits or need a co-signer, but life goes on. You’re not exiled from society. In Finland, by contrast, you’re branded with financial failure and then structurally prevented from rebuilding.

This is the paradox of debt adjustment: the very system meant to offer a second chance ends up pushing people deeper into the margins of society.

This is where debt adjustment begins — not with a fresh start, but with unrealistic budgets and economic handcuffs. And those handcuffs don’t just choke your finances; they seep into your mind, your body, your family. In Part 2, I’ll show how debt adjustment corrodes mental health and destroys physical well-being, one sleepless night and one panic attack at a time.

IT'S FINALLY OVER

THE ECONOMICS OF DEBT ADJUSTMENT

I'm looking forward to hearing from you!

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Debt adjustment begins by assigning you a so-called 'standard of living.' In Finnish legalese, this is “välttämättömät elinkustannukset”—essential living expenses. These cover food, clothing, ordinary healthcare, home upkeep, local transport (not commuting), a newspaper subscription, phone use, hobbies, and other basics.

IT'S FINALLY OVER