I am in Europe, my passport is expired about 3 months ago, but i am tied up here due to active court case for my visa. I can't renew my passport because there is no embassy here for my country. I can't do anything about not having a renewed passport, and I can stay here until the appeal is heard (might take 3-18 months)…

So how serious is it to not have a renewed passport? I don't plan on traveling outside this country. Do you know what actions are commonly taken for people who have expired passport? I have been here now for 5 years.

I am in Finland, I am from Mongolia. More importantly, is there any international rule about having a valid up to date passport at all times?

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    Check with your country's passport office - there may be alternatives for renewing your passport, such as an honorary consulate or mail to a consulate in another country. Check whether you can get the visa in question without having a current passport. – Patricia Shanahan Aug 20 '16 at 4:13
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    The embassy in Sweden should be able to help you. – Michael Hampton Aug 20 '16 at 4:50
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    If you're not planning to cross any international borders, you're probably okay with your expired passport. Once you need to travel, you may need to get an emergency travel document if you can't get a passport. Typically, your country will have designated its embassy in a nearby country (perhaps Germany?) as having responsibility for Finland. – phoog Aug 20 '16 at 5:05
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    Don' know Finland enough to provide a full answer but there are no international rules about it. In some European countries, what could happen is a fine (at most a few hundred euros) and the unpleasantness of being retained by the police for a few hours to ascertain your ID. In others, there are millions of people staying perfectly legally with an expired passport (but a valid residence document). The real question is whether you have a right to be in Finland at the moment (based on your description it seems you do, but personally I don't know). – Relaxed Aug 20 '16 at 7:44
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    Incidentally, are you certain you applied for a visa? I thought Finland did not issue long-stay visas at all, even for students, and that it used residence permits instead (it would be a credit-card size plastic card, not a sticker in your passport). – Relaxed Aug 20 '16 at 7:45