British newspaper The Guardian: Debt collection industry is endangering Czech democracy

Czech democracy is being endangered by a debt spiral that many people have no chance of exiting. The British daily The Guardian has published an online analysis on 6 January noting that Czech legislators are planning to vote on an amendment to bankruptcy laws thanks to which more people would be able to achieve debt forgiveness.

The Guardian tells the story of 54-year-old Renata, who was driven to considering suicide because of the burden of her debts. In 2008 her small construction firm went bankrupt and she lost all of her assets, but her creditors were still not satisfied.

Renata still owes approximately CZK 7 million [EUR 274 000]. She is dealing with 34 separate collections proceedings.

"It's hopeless. I see no light at the end of this tunnel," she told the paper.

"I would love to pay off part of this debt, but I have no assets, no cash," Renata said. "Moreover, I have to take care of my daughter."

According to Renata, it is worse to be a debtor in the Czech Republic than it is to be a murderer. Convicted felons are at least released after a couple of years in prison, but she will never get rid of these debts as long as she lives.

The Guardian reports that Renata is one of the 863 000 Czechs in the country of 10.6 million facing collections proceedings, and at least 150 000 of those are dealing with 10 or more proceedings against them. The daily reports that one of the debt problems is the fact that many people become adults with debts dating back to when they were minors.

One example is that of unpaid fines for travelling on mass transit without buying a ticket. A fine on the order of several hundred crowns can balloon into tens of thousands during just a few years.

Court-appointed collections firms profit from the situation in the Czech Republic, leading debtors to distrust not just the authorities, but democracy itself. "It's not surprising people don't believe in the democratic order anymore and are voting instead for the new oligarchs and populists," Jan Čulík, a Czech Studies specialist at Glasgow University in Scotland, told the paper.

Čulík says debtors do not believe in the democratic policies that have been introduced because those policies have condemned them to debt slavery, and they can still recall that such things never happened during communism. Radek Hábl, the creator of an online map showing the distribution of collections proceedings in the Czech Republic, told The Guardian that it is also interesting that the biggest support in the most recent presidential elections was enjoyed by the incumbent, Zeman, in regions where the inhabitants have the most problems with paying off their debts.

Zeman has repeatedly accused debtors of being solely to blame for their own situations. Populist candidates are also successful in those same regions.