The so-called “Milostive leto” [Jubilee] – a three-month period of exemption from additional fees on debts subject to execution by bailiff – began Thursday in Czechia and will last until November 30.
Czechs who owe money to public institutions and whose debts are being collected in enforcement proceedings initiated before October 28, 2021 can now pay the original amount of the debt and a lump sum fee of 1,818 CZK (74 €) to the debt collectors. and the execution will be terminated. Large private creditors are encouraged to follow suit.
This is the second period of this type after the previous one from the end of October 2021 to the end of January 2022 was able to release some 15,000 debtors. In total, some 50,000 enforcement procedures have been closed.
The period called “Jubilee” alludes to the biblical tradition of forgiving debts every seven years.
The Chamber of Bailiffs criticized the measure, arguing that bailiffs are not sufficiently compensated for the administrative burden of stopping eligible executions. The fixed fee of €74 is a compromise compensation concluded by the legislator for the current period.
“It was one of our requests, that the compensation reflects the enforcement rules in force”, declared the president of the Chamber of Judicial Officers Jan Mlynarcik, quoted by Czech television.
In the past, bailiffs have been documented to engage in highly unethical behavior during enforcement proceedings, including blackmailing and confiscating children’s toys and other property used by children. During the COVID-19 wave, a bailiff was documented for confiscating a family’s only computer, cutting off the family’s children from online education.
During the previous Jubilee period, bailiffs also did not purposely respond to eligible requests to terminate execution. Under current Jubilee rules, bailiffs will be required to respond within 15 days at the latest.
“If they don’t respond, the period for using the Jubilee terms is automatically extended by the length of the delay,” said Danile Hule, head of debt counseling at the NGO People in Need.
Czechia is grappling with an ongoing debt crisis fueled by a combination of years of unregulated money lending activity, extensive rights granted to bailiffs and harsh terms of personal bankruptcy, leaving some 700 000 Czechs (about 6.4% of the population) trapped in endless lawsuits, often facing debts that cannot be repaid in their lifetime. Politicians have turned a blind eye for years, partly because of corrupt networks, partly because of an ideological fixation on debtors repaying all their debts.
As many NGOs point out, bailiffs were able to act effectively as private debt collection contractors motivated to incur late fees and administration costs on original debts, multiplying the amount subject to enforcement as well than their rewards.
As the winter months approach, fears abound of an increase in the number of enforcement proceedings, with low-income families, pensioners and other vulnerable groups of the population unable to cope with the dramatic increase in the cost of living.
According to the latest research from CVVM affiliated with the Czech Academy of Sciences, around half of Czech households expect their material conditions to deteriorate. Last year, the ratio was 22% Czechs.
Improvements are more often expected by Czechs with a university education, people under 29, entrepreneurs and the self-employed, while worsening conditions are expected by people aged 65 and over. More right-wing voters expect an improvement than left-wing voters.