In 2022, the office’s operations gradually returned to their former state after the changes brought by COVID-19. It started to re-administer individuals for consultation at the office’s office, but electronic services and telephone consultation have gained traction and have been a good fit for most people to use those services. Telephone consultation is in fact in most cases the first contact between individuals and the office. The office serves the whole country and emphasises good accessibility, but in the last year, work has been continuing to improve electronic services further and the “middle region” will hopefully come into view in 2023. In the region, applicants will be able to communicate with the office, receive and send documents and monitor the status of their application.

During the year, the Office received 727 applications for assistance due to financial problems, a slight decrease from 2021.

The Office is very ambitious in identifying the group that assists in searches at any given time. The Office’s analytical work is important and gives an indication of what characterizes the group that is in the most difficult situation in our society at any given time. The Office has in the last years brought the government and other parties involved to the attention of the problems that individuals are facing. The results of the analysis can be used to decide what policy is being developed in the education and services of the Office at any given time.

Analysis work in 2022 revealed that the largest group that sought assistance due to financial problems were disabled people. Disabled people comprised 40% of all applicants for assistance due to financial problems during the year. In recent years, the number of disabled people applying for assistance from the Office has increased steadily, and this group was only 28% of all applicants in 2016. It is clear from the Office’s analyses that this group has the least scope to respond to unexpected expenses; among other things, the group’s income has changed slightly for the better. The Office noted the status of disabled people in 2022, including at the level of the Welfare Watch.

The agreement with the Ministry of Social Affairs and the labour market on the continuation of the educational project Leitin að peningunum was signed in October 2022. The largest group of all applicants for assistance due to financial problems at the Debtors’ Ombudsman in 2022 were disabled people. A large group of applicants were also individuals in a socially vulnerable position. The goal is now to try to reach out to these groups and disseminate education with tailored information on finances that people can reflect on. Cooperation will be sought with stakeholder organizations of the groups to which the follow-up project relates. The goal of the Office of Education is to prepare educational material that is accessible and free for everyone.

In February 2022, a new booklet on payment adjustment was published and is intended to give individuals insight into the process that payment adjustment is. Payment adjustment is the office’s most important tool and has served individuals in financial difficulty well in recent years. As I mentioned above, the office’s analyses show that the trend has been increasing numbers of people who seek assistance from the office who live in difficult social circumstances and it is important that the payment adjustment resources develop in line with the needs of applicants and in order to do so, it is necessary to undergo legal reforms as the office has previously noted.

It is the hope of the undersigned that the professional work done by the Debtors' Ombudsman will not only benefit those who seek assistance from us but also those who seek information on personal finances regardless of financial status and I would like to extend my special thanks to the staff of the Office for their contributions both to education and to the service of individuals who seek assistance from the Office.

I would also like to thank Minister of Social Affairs Guðmundur Ingi Guðbrandsson for making the decision to continue supporting the educational project The Search for Money.

The office is primarily a service where individuals can receive free assistance from experts in resolving financial problems.

Main projects:

• Advice

• Call inquiries and telephone consultation

• Education about household finances

• Type of maintenance criterion

The Office also implements the following resources:

• Implementation

• Granting financial assistance to

The objectives of the Debtors Ombudsman

• Always provide the best service possible and the emphasis is on constantly looking for ways to improve it.

• The Embassy maintains a strong telephone consultation where you can seek more information about the services available and receive answers to simple questions and advice on where to seek further answers or services.

• In addition, you can send inquiries to the Office by e-mail and receive written answers to individual inquiries. You can also request a call on the web.

Application process

The office seeks to offer its employees flexible working hours with the aim of making it easier for employees to balance work and private life without compromising the services provided by the office.

The office has been fortunate over the years with good staff. Some of the employees have worked since the office was founded. The office has therefore developed a great knowledge of the financial affairs of the households.

At the end of 2022, the office had 14 employees in 13,88 positions.

The Debtors Ombudsman supports employees to take care of their health and exercise.

The employees of the Office in 2022 had diverse education and extensive experience, but the average age of employment was 11 years. This includes the age of employees who previously worked at the Financial Advisory Office.

The Debtors' Ombudsman's ( Debtors' Ombudsman) standards are primarily intended as a reference when solving debt problems through the Office's resources. The standards are intended for a shorter period than the standards of various other government agencies, for example the typical standards of the Ministry of Welfare. The Office's standards take into account real expenditure of Icelandic households according to the expenditure survey of Icelandic households by Statistics Iceland.

Applicants must state in their application various costs of living, such as heat, electricity, childcare, property taxes and they are added to other costs to calculate the total cost of living for the family. The criteria thus take into account the circumstances of each applicant.

In recent years, there has been an increased emphasis on providing general education about household finances. The website of the Office provides various information on finances, maintenance criteria and tools that can be used by individuals. These include Excel document for household accounting and Kladdann, a weekly diary for individuals who want to get a handle on their finances.

Analysis work

The focus has been on identifying the group that the office seeks from and how often that affects the policy that is defined in education and services of the office. The office has also had good cooperation with the welfare department of the City of Reykjavík. The cooperation has in the past years been the main policy of UMS staff to offer education for social workers at the centers of the City of Reykjavík and for groups of individuals that use the services of the welfare department, e.g. at Virknihús, Tinna etc.

Figures on money

In 2022, a pilot project was started in collaboration with Virknihús on behalf of the City of Reykjavík. The project included offering a course for individuals in the project out to the labour market on behalf of Virknimiðlun Reykjavíkurborgar.

The courses were called Numbers about Money, each course was 3 times and the goal was to enable participants to deal with their finances in a positive and constructive way.

Financial awareness training

In early 2022, UMS participated in the creation of a digital course by the Open University in HR and Finance. A representative of the Office provided the education in the category of household finance.

The course is available on the website of the University of Iceland.

Education in 2022

When an individual has decided to seek assistance from the Debtors Ombudsman because of financial problems, the first step is to submit an application.

The first step in processing an application is always a conversation with the applicant, where the process is reviewed and the applicant's expectations for doing so. The counselor subsequently gathers necessary data on the applicant's debt situation.

The counsellor then analyses the applicant's situation and evaluates in consultation with him which remedies are most suitable for resolving the problem of the individual.

Total number of applications received by the Directorate in 2022

• 727 Applications for assistance due to financial problems

Here you can see how the applications received in 2022 went after analysis.

• 58 % Advice

• 32 % Payment adjustment

• 10 % Financial aid for the payment of transition costs

Applications for financial assistance in figures

Advice is initiated after the application for assistance due to financial problems has been received and an analysis has been carried out in consultation with the applicant.

The advice includes the preparation of a credit difficulties assessment with the aim of gaining an overall view of the financial situation and seeking solutions.

With advice from the Debtors Ombudsman, the aim is to resolve financial difficulties before the problem has become such that other remedies, such as a payment adjustment or a bankruptcy transfer, are needed.

After processing the application, the applicant will receive a summary of his/her financial situation, a credit difficulties assessment, and if possible, proposals for improvements. In some cases, counsellors assist applicants in seeking agreements with creditors, which may include, among other things, loan rescheduling, loan cancellation, loan freezing or loan modification.

If the above measures are not sufficient, applicants are advised to apply for personal adjustment or financial assistance to pay insurance for the costs of bankruptcy proceedings with the debtor's representative.

During the year, applications were processed

• men 64 %

• women 36 %

The largest number of applications in 2021 were individual applications (1+0), or 74%.

• 369 - Total number of applications for counselling

• 282 - Total number of applications processed

Advice in numbers

In 2021, the following were:

• 29% with negative payment capacity

• average payment capacity 64,098 ISK

Information on applicants

The objective of the Act on personal accounting is to enable individuals in severe credit difficulties to restructure their finances and to strike a balance between debt and ability to pay so that it is realistic for the debtor to meet his obligations for the foreseeable future.

The processing of payment adjustment cases is carried out entirely within the office where lawyers handle the processing of payment adjustment cases from the beginning of the application to the end of the case.

The application system of the Directorate is electronic and applicants must register with electronic ID.

Processing of applications for individual payment adjustment can be completed in three ways, through approval, through refusal and through the applicant himself deciding to withdraw his application. More than one reason can be behind the rejection of an application for payment adjustment.

Reasons for refusals in 2022

Some changes can be seen in which refusal items were most often referred to in 2022.

Article 6 of the Act on personal credit adjustment contains certain circumstances that may prevent the granting of credit adjustment. The provision is divided into two paragraphs; in paragraph 1, the reasons that lead to the debtor’s representative rejecting an application are listed. In paragraph 2, it is stated that the debtor’s representative may refuse permission to seek credit adjustment if it is unfit to grant it.

• In 29% of the refusals in 2022, reference was made to paragraph 2(b), according to which an application can be refused if the debtor has incurred a debt at the time that he was clearly unable to pay.

• In 27 % of the refusals, the reference was made to paragraph 1(b), which states that the authorisation for a payment adjustment should be refused if the available data does not give a sufficiently clear picture of the debtor's finances.

• In 20 % of cases, the reference to paragraph 2(c) was made under that point. An application may be refused if the debtor is deemed to have conducted his finances in a materially alarming manner or to have taken a financial risk that was not in accordance with the debtor's financial position at the time of incurring the financial obligation.

It can be noted that in recent years the most common reason for refusal of an application has been that the available data does not give a sufficiently clear picture of the debtor’s financial situation, as referred to in Article 6(1)(b) and 75% of refusals in 2021 were referred to that item.

Appellate Decisions

Decisions of the Debtors Ombudsman on refusing the authorization to seek payment adjustment and on cancelling the authorization to seek payment adjustment can be appealed to the Welfare Appeals Board.

In 2022, 2 decisions were appealed. In the first appeal, the Ombudsman’s decision was confirmed, but the second appeal was dismissed.

Applications for payment adjustment in 2022

• 199 applications

When the applications for payment adjustment are examined, it can be seen that women are in the majority of those who apply for individual payment adjustment.

• 67% women

• 33% male

The majority of applicants were individuals with the family label 1+0 or 60%

• 45% approved

• 42% refused

• 13% withdrawn

Payment adjustment in figures

In 2021, there were:

• 41% with negative payment capacity

• Average payment capacity 15.086 ISK

Information on applicants

Agreements for payment adjustment

After approving the application for a payment adjustment, a coordinator is appointed and the process of negotiating contracts begins.

When the depositary prepares a bill for a payment adjustment agreement, the law on payment adjustment stipulates that the bill shall ensure the maintenance of the debtor and his family and that it is realistic that he will be able to meet his obligations, restructure his finances and establish a balance between debt and ability to pay. With payment adjustment, it may be provided for the total surrender of individual claims, their proportional reduction, their maturity, the modification of the terms, their payment with a share of the instalment amount paid in certain intervals over a certain period, the change of form of payment of claims or all of the above at the same time.

• In 2022, 66 agreements were concluded for payment adjustment, and 82% of agreements provided for 100% repayment of all contractual obligations.

• The period of payment adjustment in contracts in 2022 ranged from no period to 46 months. The most common result was 0 months in 35% of cases and 12 months in 33% of cases.

When contracts are awarded, various factors are considered, e.g. debt amount, family status and age. It is the role of the depositary in consultation with the debtor to assess how a contract is best suited to meet the conditions of the law discussed above.

In 2022, 66 agreements were concluded. Gender ratio:

• 62 % women

• 38 % male

Most applications were processed as individual contracts (1+0) or 62%

Contracts for payment adjustment in figures

In 2022, there were:

• 55% with negative payment capacity

• Average payment capacity 11.920 ISK

Amendment to the Agreement

When the depositary proposes to enter into a contract between the debtor and the creditor, the objective is always that the contract is realistic and is suitable for solving the creditor's payment and debt problems. However, it is never possible to exclude that something occurs during the contract period that prevents the debtor from fulfilling the contract that was entered into.

If unforeseen circumstances occur during the contract period that weaken the ability of the debtor to comply with his payment adjustment agreement, the debtor may request the creditor to change the agreement.

Since 2013, the Debtors Ombudsman has been working on a procedure whereby the Debtors Ombudsman acts as a mediator for the claimant on behalf of the debtor, although the law allows the debtor to perform this role himself. Experience has shown that it is a significant burden for the debtor to perform this role himself and the office has proven better able to reach a settlement on the amended agreement in line with the ability of the debtor.

The number of amendments was slightly higher in 2022, but agreement on amendments to the agreements has been successful.

Total number in 2022:

• 19 amendments

• 15 agreements amended

• 4 Repealed Requests

From the beginning, amendments have been accepted in 68% of cases.

The remedy consists in the applicant requesting to receive a guarantee for the cost of liquidation for bankruptcy proceedings, subject to certain conditions.

The aim is to enable individuals who have experienced significant payment problems and have unsuccessfully sought other payment solutions to claim for the change of their livestock.

The main criteria are that the applicant has significant payment problems, that the applicant cannot meet the insurance for the costs of bankruptcy and that other payment problems are not sufficient to solve the applicant’s payment problems. Similar criteria are also contained in the Act on Individuals’ Payment Adjustment No. 101/2010, which the applicant must meet in order to be authorized to seek payment adjustment.

There may be more than one reason for the rejection of an application for financial aid to cover the cost of the exchange.

In 2022, the most common reason for rejection of an application was that the applicant did not meet the requirement of Article 3(1)(b) of the Bankruptcy Code, that the applicant must not be able to satisfy the obligation to pay the cost of the bankruptcy transaction, taking into account the assets and liabilities of the bank.

In 2022, 30 individuals who had received approval for financial assistance to pay collateral for the costs of bankruptcy proceedings requested that their farms be taken to bankruptcy.

The law on financial assistance for payment of insurance for the cost of liquidation due to bankruptcy does not contain a clause on deadlines, therefore individuals can in fact go to the district court at any time with their consent and submit documents. At the end of 2022, 65 unpaid consents were outstanding.

Applications for financial assistance to pay the transition costs in 2022 in figures

• 63 - Total number of applications received

When the applications for financial assistance to pay the cost of the exchange are examined, it can be seen that men are in the majority of applicants. The applicants were:

• 67% male

• 33% women

The largest number of applications were from individuals (1+0) or 78%

In 2022, 66 applications for financial assistance for the cost of the exchange were processed. The results of the applications are divided into approval, rejection or withdrawal.

• 41 applications approved

• 24 applications rejected

• 1 application rejected

Other information:

• 61% with negative payment capacity

• average payment capacity -27.920 ISK

Statistical information on exchange costs