The Czech Republic is facing the most revolutionary change in foreclosures in the last 20 years. I see! brings you a detailed overview of the most fundamental changes.
- Minor executions of up to 1500 crowns will end after 3 years of unsuccessful recovery. The executor will then receive 1,050 crowns for each stopped execution and one person will be entitled to five similar ones. The executor pays the state. Creditors will also be compensated. They will be able to deduct 450 crowns from taxes for each pledged receivable.
- If, within the last 6 years from the execution, the amount recovered is not even sufficient to cover the costs of the execution, the executor will invite the creditor to give him consent to its suspension. However, the creditor does not have to agree with this and it will be enough if he pays the so-called advance payment for further execution and the enforcement will continue for another three years. However, unsuccessful executions will be definitively stopped after 12 years of recovery at the latest. The new regulation also provides for the possibility of exemption from the payment of the advance due to the financial situation when proving the property of the beneficiary.
- The debtor will repay the principal first, ie the original debt, then the interest, then the default interest, and only finally will the creditor’s costs come. In practice, this is a fundamental change – people will have a better chance of getting rid of debt, because when they pay it off, they will stop getting more and more interest.
- Newly, people cannot include pension contributions for persons affected by the communist regime and participants in the resistance. Furthermore, the amounts needed to cover the costs of providing social services in residential form are not subject to execution, such as stays in a home for the elderly, a weekly hospital, inpatient care and other special facilities. ● The debtor’s foreclosures are humanized at home. It will no longer be possible to proceed in this way against pensioners with a minimum wage, the disabled (2nd and 3rd degree of disability) and children. Other debtors can avoid this inconvenience by voluntarily paying CZK 1,500 per month from their non-seizable minimum. However, if the debtor has assets with a value exceeding CZK 54,000, the executor may confiscate it.
- The wage payer will have to provide the executor with data on the wage and any other income or deductions of the employee (ie the debtor).
- A central official board headed by the Chamber of Executors will be established, which will be accessible to the public remotely. Addressees who are hard to reach will be asked through this board to pick up the document or request that it be sent to another address.
- The person with multiple executions has so far had to contact each executor separately to find out how much he owes whom and for what. Newly, executors must regularly update the information in the central register and also state the total amount recovered, not just the original debt, as has been the case so far. On average, there are six proceedings per person in execution. The first extract from the register should be free, others will be for a fee.
- From August, executors and other people on the enforcement side will have to record phone calls with debtors, store them and document them if necessary. The debtor will have the right to inspect this file.
“Grace” until January 28
The pardon, known as Merciful Summer, was proclaimed for three months, from October 28, 2021 to January 28, 2022. At any time during this time, it is possible to pay for his execution. The debtors are thus forgiven of interest and penalties, which in some cases are large amounts. However, this only applies to debts to public entities, this does not apply to private companies. The condition for the use of the Merciful Summer is that the debtor must not be in insolvency proceedings and at the same time the execution must be handled by a bailiff. This means that the action does not include debts that are directly enforced, for example, by the customs or tax administration. The principal and costs in the amount of CZK 750 (+ VAT) must be paid by 28 January 2022 at the latest, the remaining costs, penalties and fees are forgiven and become unenforceable. Further details can be found on the website: www.milostiveleto.cz