Merciful Summer gives debtors in foreclosure chance to live new life
November 2, 2021 Articles

Merciful Summer gives debtors in foreclosure chance to live new life

Over the years, the debts of countless people in the Czech Republic have increased many times over due to high penalties. The unfavorable situation led them into a debt trap, from which almost no one can get out on their own. An amendment to the Enforcement Order and Civil Procedure Code, the so-called Merciful Summer, should help the indebted to solve this difficult situation. It will allow debtors with a court-ordered execution to pay only the debt itself - the so-called principal - without interest and penalties. However, this option will be limited in time, which is necessary to be wary of.

Merciful Summer runs from October 28, 2021 to January 28, 2022. For people who owe money to public institutions, a chance for a new life will soon open up. These are, for example, debts related to payment of social or health insurance, the lease of a municipal flat, or debts towards institutions such as ČEZ, Czech Radio, Czech Television, transport companies, schools, hospitals and such, which are enforced by a bailiff.

If the debtors manage to repay the principal during the next quarter of the year - ie the basic amount owed, penalties and interest will be forgiven. The debtor pays only a set fee of 908 crowns for administrative acts. "I believe that Merciful Summer will enable many people to get rid of the debt burden and return to normal life with relief," says Iva Kuchyňková, manager for advocacy activities of Caritas Czech Republic in the social field.

Caritas welcomes Merciful Summer because it helps those who are in a difficult financial situation. "As a non-profit organization working with poor families that have fallen into debt traps, we have been actively cooperating and supporting them for a long time on legislative changes," adds Iva Kuchyňková.

  • WHEN: Merciful Summer is effective from October 28, 2021 to January 28, 2022. Attention: It is to be expected that any payments intended to settle a debt under Merciful Summer that the distrainer gets at any time before this date will be used as before, ie to pay for accessories, and not the basic amount - the principal. Foreclosure deductions would therefore not be included in the Merciful Summer payment.
  • WHO: Forgiveness of debt accessories only applies to executions enforced by a court, ie a bailiff. It therefore does not apply to administrative and tax executions. The debtor must also not be insolvent.
  • TO: These are debts to public entities such as: state, territorial self-governing unit (including city district, city region), state contributory organization or contributory organization of territorial self-governing unit (eg regions), public university, public research institution, state fund, a voluntary association of municipalities, a regional operational programme, an institute or a public benefit society, established by the state or territorial self - governing unit, state or national enterprise, health insurance company, Czech Television, Czech Radio, transport company, then a legal entity in which the state or territorial self-governing unit has a majority ownership interest, etc.
  • HOW: When paying the principal, the debtors must state that they want to use the Merciful Summer and invite the distrainer to proceed in accordance with Act No. 286/2021 Coll., Part 2, Article IV, point 25.

Caritas Czech Republic has built a network of 72 counseling centers throughout the country, of which 53 will advise clients on the steps needed for debt relief.