Norway has a Debt Settlement Agreement Act (gjeldsordningsloven). The purpose of the agreement is to enable people in serious debt to regain control of their financial situation. According to the act, people with serious and permanent problems in paying their debts can have their debts cancelled in return for paying some of them back. The Act is based on the principles of social economy, according to which people who are no longer able to settle their financial obligations should be given a chance for a new start. If a debtor is given the opportunity to write off his debt, he may become more motivated to find a job, for example. Without the possibility offered by the aforementioned law, any income earned by the debtor would have to be used to repay the debt. For many debtors, this would be very demotivating.
According to the Act, a debtor must meet a number of conditions in order to enter into a debt forgiveness agreement in exchange for partial repayment of debts over a period of up to 5 years. The Act does not allow the debtor to achieve only a financial benefit for himself. Therefore, it restricts the ability to enter into such an agreement if it would harm other members of society or be unfair to other debtors.