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<p>Recent amendments to the Estonian Law of Obligations Act require credit providers to offer consumers forbearance measures (out-of-court adjustments and refinancing in cases of financial difficulty). This study examines the legal framework and practical application of such measures in Estonia. We adopt a qualitative approach to analyze the perspectives of key stakeholders, including regulators, credit providers, judges, and debt counselors. Our findings indicate that the recent introduction of obligations to provide forbearance has led to inconsistent and often formalistic implementation by credit providers, with marked differences between banks and non-banks. Low financial literacy and avoidance behavior remain key barriers to early intervention, and popular measures, such as debt moratoria and refinancing, risk increasing consumers’ debt burden. We posit that the implementation of the new Consumer Credit Directive (2023/2225) into Estonian law will not significantly improve this situation. On the contrary, in some aspects, the new rules might be detrimental to consumers. We highlight the need for additional supervision and integrated policy measures.</p>

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Evaluating Consumer Credit Forbearance Regulation: Evidence from an Estonian Policy Change

  • 期刊论文

  • 发表日期：

    2026年5月25日

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  • Kristjan Pulk,
  • Piia Kalamees

摘要

Recent amendments to the Estonian Law of Obligations Act require credit providers to offer consumers forbearance measures (out-of-court adjustments and refinancing in cases of financial difficulty). This study examines the legal framework and practical application of such measures in Estonia. We adopt a qualitative approach to analyze the perspectives of key stakeholders, including regulators, credit providers, judges, and debt counselors. Our findings indicate that the recent introduction of obligations to provide forbearance has led to inconsistent and often formalistic implementation by credit providers, with marked differences between banks and non-banks. Low financial literacy and avoidance behavior remain key barriers to early intervention, and popular measures, such as debt moratoria and refinancing, risk increasing consumers’ debt burden. We posit that the implementation of the new Consumer Credit Directive (2023/2225) into Estonian law will not significantly improve this situation. On the contrary, in some aspects, the new rules might be detrimental to consumers. We highlight the need for additional supervision and integrated policy measures.