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Czech Government approves bankruptcy amendment bill adjusting conditions for debt relief

21.1.2018 9:05
Robert Pelikán (PHOTO: www.online.muni.cz)
Robert Pelikán (PHOTO: www.online.muni.cz)

On 18 January it was reported by news server justice.cz that the Czech Government has approved a so-called debt relief amendment to bankruptcy legislation that will significantly change the conditions for debt relief. The amendment will make the process of declaring bankruptcy accessible to a broader circle of debtors who are making a good-faith effort to pay off their obligations and will aid people in the so-called debt trap.

At the same time, however, the bill counts on debtors being actively involved in economic activity and urges them to behave responsibly. "This is an offer for debtors who are motivated and want to return to the normal economy. Instead of the state sending them welfare, they will pay the state taxes. The new rule is not at all a debt amnesty, but a system for the honest repayment of almost all the debtors' earnings to creditors over the course of seven years," Czech Justice Minister Robert Pelikán said after the cabinet session.

According to the news rules, it will suffice for a debtor to offer collateral to creditors to repay debts and for the debtor to expend all efforts to paying them off over the next seven years. The amendment also facilitates faster debt relief for debtors who pay at least 50 % of the obligations held by their unsecured creditors in three years.

The bill had already been submitted to the Chamber of Deputies by the previous Government. Because of the autumn elections to the lower house, however, the process of submitting the bill had to be repeated, and now the bill will proceed to the Chamber's Organizational Committee and then to a first reading

bau, justice.cz, translated by Gwendolyn Albert
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dluh, ministr spravedlnosti, Robert Pelikán, zákon



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