There is no revolution in executions

Proposals for the reform of the system of executions, which has been in force in the Czech Republic for twenty years, were rejected by the Chamber’s Constitutional and Legal Committee. This was decided by the votes of the ANO and ODS deputies, contrary to the opinion of the Subcommittee on Executions, Insolvency and Debt Relief.

Along with the Pirates, the People’s Party and STAN, the Judicial Union, the Czech-Moravian Confederation of Trade Unions and a number of experts are also criticizing the rejection of deeper changes. The introduction of territoriality, which has been valid for insolvency administrators since 2014, is also being promoted by the Bailiffs’ Chamber.

“The current regulation has shown that the principles that have been set in the work of bailiffs are in some cases and unfortunately increasingly reflected in the violation of their independence,” said the head of the Judicial Union Daniela Zemanová.

She pointed out that large and thus lucrative receivables have long been resolved by only a few of the largest executory offices in the Czech Republic, which are existentially dependent on banks or insurance companies. “Undoubtedly, this is a violation of the principle of independence and the judiciary must be defined and defended against it,” Zemanová added.

Lawyer Petr Němec, who deals with illegal executions, agrees that judicial control of executors, who are allowed to follow market principles, is almost impossible. “The practice of choosing creditors allows for clientelistic ties. It is similar to choosing a judge or a cadastral official, “he said.

Opponents of territoriality argue that there are significant differences between enforcement authorities in both size and quality. “Territoriality would seriously harm creditors, they should have the free choice of executor,” says Aleš Rod from the Center for Economic and Market Analysis.

Collection companies have the same opinion. “An accompanying phenomenon of territoriality would be a deterioration in the enforcement of the law, which would in turn be passed on to properly paying people in the form of price increases,” said Vladimír Vachela from the collection company Eos Ksi.

In addition to the interconnection of large creditors with several executors, the current system is liquidation for smaller debtors. In order to support the other executors, they focus on several of the debtor at once and seize all his property. As a result, it is very difficult for such people to return to normal life.

The principle was to change the debtor – one executor. He assumed the merging of all foreclosures against one debtor into one proceeding and an agreement on the repayment schedule. “This would make it easier for us to get debtors out of the black economy,” said Josef Středula, head of the Czech-Moravian Confederation of Trade Unions, noting that multiple debts are paralyzed at once, pushing them out of the legal labor market.

This also brings complications to employers, who have to communicate with executors under the threat of high fines. “It is absurd for ten or more executors to execute against one employee, who ask the employer for the same information,” said Pavla Aschermannová from the Rubikon Center, which works with companies to find places for debtors.

The program statement of the government of YES and the Social Democracy states that the territoriality of executors and the principle of one debtor – one executor will be considered, including alternatives. “We need the stability of the system, not revolutionary steps,” Věra Procházková (YES) rejected more thorough amendments to the execution rules.

Her colleague, the former Minister of Justice for the ODS, Pavel Blažek, warned against the collapse of the Czech legal system. “Restraint is entirely appropriate. It is a revolutionary proposal, “he said.

The debate on the amendment to the Execution Rules has lasted in this election period since last year, and the Constitutional and Legal Committee finally agreed to only a few partial drafts. Among other things, protected accounts, enforced by Kateřina Valachová (ČSSD) and Patrik Nacher (ANO), help the debtors.

According to Radek Hábl from the Institute for the Prevention and Solution of Over-indebtedness, the reform of the execution system in the Czech Republic has postponed indefinitely. “Apart from minor adjustments, there is no fundamental change. The YES movement thus continues the tradition of the ruling parties, which, despite clear societal and economic implications, will continue to leave the judiciary in the hands of the execution market, however the Judicial Union defines itself against this, “said Hábl.

What could change in the executions this year
  • Borrowers will have protected accounts. These will be special bank accounts that will prevent the unauthorized execution of non-seizable money.
  • The order of offsetting the proceeds of the execution changes. First the principal is paid and then the accessories to avoid the endless swelling of debts on small receivables.
  • Penalties for social and health insurance will be reduced.
  • It would be enough for the debtors to repay the principal and pay 750 crowns for the costs of the proceedings to the state. In addition, long-term fruitless executions with a principal of up to CZK 1,500 could be stopped. Creditors would recover part of the claim from the state and the executors would be reimbursed by the state for part of the costs associated with the recovery of money.
  • The parliamentary legislators described the amendment of the group of deputies restricting the execution of movables as non-voting. However, the amended amendment will be tabled at second reading.
The number of proceedings due to the crisis is likely to increase

After the crisis in 2008, the number of executions grew by one million a year, in recent years it has risen by half a million. According to experts, hundreds of thousands of people may be trapped in the debt trap, while maintaining the current model, where more executors suddenly target the debtor and block his real estate, accounts and income.

The current data of the Central Register of Executions show that the number of natural persons in execution has decreased by 33,000 since January. However, the number of people against whom one or more proceedings are being conducted in the Czech Republic is still high. In the middle of the summer there were 757 thousand of them, compared to last year’s 790 thousand.

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