The Debtors’ Ombudsman (UMS) is responsible for implementing the payment adjustment, which is an important resource for individuals in severe payment difficulties and allows them to seek voluntary agreements with the claimants through the Ombudsman. The goal of the payment adjustment is to achieve a balance between debt and payment capacity and the purpose of the changes is both to increase the efficiency of the resource and better meet the needs of applicants.

The main changes are as follows:

Better powers for property owners

UMS can now propose to the claimant to accept a maturity of mortgage claims if the debtor cannot pay the actual mortgage payments under certain circumstances and the authorisation to propose lower mortgage payments is extended. The modified payment arrangements may in general last up to one year. The aim is to meet special circumstances such as high interest rates or temporary circumstances such as loss of income. Applicants can then seek a correction of the mortgage overdraft of a property at UMS while negotiations with the claimant are ongoing. It will thus be possible to request a reduction in the mortgage so that it is based on the market value of the property, subject to certain conditions.

More comprehensive remedies

In order to make the remedy more comprehensive, certain changes will be made to the treatment of claims that are outside the payment adjustment. Claims such as VAT, fines and co-payments can thus become part of the payment schedule of a contract even though they may not be provided for forgiveness. In this way, individuals do not have to negotiate separately with the claimants concerned. The change is also made to include active claims for student loan guarantee obligations. Student loan guaranteers who have financial difficulties can now seek a comprehensive solution through payment adjustment.

Extending conditions

Conditions are extended with the aim of enabling more people to seek payment adjustment. Furthermore, individuals who are permanently residing abroad can now seek payment adjustment for Icelandic claims, subject to certain conditions. It should also be mentioned that applicants are now made much easier to request a change to the agreement on payment adjustment in case of special or unforeseeable circumstances.

Creditinfo’s powers are limited

Creditinfo will not be allowed to record information on the applicant's payment adjustment in a default register or any other form of data set that is shared. The company will then be able to use information on the payment adjustment for the purpose of a credit report for one year only.

The payment adjustment was first implemented in 2010 and approximately 8,800 applications have been received since the beginning. The measure has proven its value but there has been a great need for a review of the law. UMS therefore welcomes the changes based on the experience and knowledge that has developed in the field over the years.