Credit blacklists: why you must never leave bills unpaid in Finland

Marie (assumed name) is a young woman with foreigner background who lives in Finland. A little over a year ago she had to return to her home country urgently due to a serious family problem that kept her there for several months. 

The matter was so important to her and her family that everything related to her life in Finland was momentarily taken a back seat. To the point that she neglected some of her payment obligations in Finland and she was three months without paying her apartment's rent.

Upon her return, already freed from the urgency that had kept her at home, she wanted to settle her affairs in Finland, but she found the unpleasant surprise that an eviction order had been issued against her. And that was not the worst: her name was also included in a blacklist of defaulters, so she could not do anymore things as basic as renting another place, re-contracting a telephone line or buying anything in instalments.

Ignore bills is always a bad decision

Marie's case reflects a situation experienced by many people in Finland, whether they are foreigners or locals. Ignoring or simply 'forgetting to pay' pending bills is always a bad business in this country, because it can lead the person who does it to a situation of temporary 'credit death' and complicate her/his access to basic services such as housing or banking services.

In the case of housing, what may happen when one stops paying depends a lot on the owner of the property: some private owners may 'understand' the situation and offer the opportunity to fix the mess, though on paper they have the right to cancel the rental contract. So if someone is as lucky to have a chance to solve it in such a way, congratulations.

The thing is more complicated when it comes to other types of bills such as banking bills, telephone or electricity. As you might have experienced before, large companies -unlike small property owners- have no soul and in most cases just apply the protocol that corresponds to the situation without taking into account the circumstances of the user.

Bank always wins

You must not think that the debt claimer will get fed up with sending you letters and give up. As in the casino, the bank always wins.

First they will send you several warnings and you will continue receiving the invoice with surcharges again and again. After that stage, a collection office will take responsibility on your case and contact you -while the bill continues growing- to try to collect the debt. If you still ignore the notices or you declare insolvency to not pay, the company will communicate the situation to any of the credit record companies.

At this point you must be prepared for the worst. For a non-paid bill the user may end up becoming a sort of a plague for companies and lenders. And the consequences will be the following:

• Normally his/her credit card might be cancelled.
• Need a loan from the bank? Forget about it.
• To rent a house/apartment will be very difficult, especially from the private market.
• Will not be able to buy anything against invoice or instalments.
• Only prepaid phone accounts will be at his/her reach.

This situation will last for 2-3 years. And of course, if during this period the consumer incurs in another default they will start counting again.

How to avoid blacklists

Foreigner.fi has consulted the matter with a lawyer in order to know which is the best way to avoid bad credit records and being included in one of those feared blacklists.

According to this source, the first thing one must do is, of course, try to pay all the bills on time if it is possible. In case that is not, this expert remarks that the worst you can do is to be passive and ignore the problem.

"React, do something!", encourages the consulted legal source. "Don´t avoid opening the envelopes and if you cannot pay the bill always contact with the company or the creditor to whom you owe, tell you are willing to pay but you need for more time. For instance with the electrics you can probably extend the due date. The worse thing you can do is to stay passive".

This expert also explains that if you manage to pay the pending invoice late, but still before the collection office enters the scene "you still are relatively safe". Even with collection agencies may be possible to setup some payment plans. But if you continue ignoring everything, including the collection agencies, "then you are screwed", he claims. The debt will increase largely due to court fees and enforcement fees and you will end up owing a big sum and without any financial reliability.

"Once you are in the blacklist you can´t do anything anymore, you have reached the point of no return. Before that it is possible still to overturn the whole process, but the later you react the more money will cost you and in the end even an unpaid 20 euros phone bill can have a huge negative impact in your life, for instance preventing you from renting an apartment", he warns.