Merciful Summer has already begun. Get to know the process of debt relief
November 9, 2021 Articles

Merciful Summer has already begun. Get to know the process of debt relief

In July this year, the Parliament of the Czech Republic approved an amendment to the Execution Act, which also includes the so-called Merciful Summer. This time-limited measure should help tens of thousands of people break out of the debt trap.

Specifically, in the period from 28 October 2021 to 28 January 2022, some debtors will be able to terminate their foreclosures which they have incurred in the past with public bodies. In short, it is necessary to repay the principal of the debt in a lump sum, and in addition to paying the fee to the executor, including VAT, for the costs of terminating the execution. The rest of the debt, plus default interest and other charges, will then be forgiven. You can read more about how to proceed in the text below.

It is important to answer the following questions first:

  • Do I have a debt with a public creditor (eg transport companies, VZP, ČEZ or the municipal office for rent)?
  • Were my enforcement proceedings initiated by 27 October 2021 at the latest?
  • Has debt relief been approved for me in insolvency proceedings?
  • Is my execution handled by a bailiff (does not apply to tax or administrative executions)?

If the debtor answers the questions in the affirmative, he or she most likely meets all the conditions required by law and should proceed as follows.

The next step will be to determine the current amount of principal recovered in execution proceedings, ie the amount of the original debt without so-called debt accessories, such as interest, fines, penalties for late repayment, legal fees, court fees, etc. If the debtor has started in the past to repay the debt, the remaining principal may be lower than the original amount of the debt. But beware, not all the money they have paid so far is automatically deducted from the principal. The previous installments likely went to cover the mentioned sanctions, and the principal is still the same as at the beginning.

The best solution to find out the actual amount of the principal is to contact the bailiff directly, preferably by registered letter or data box. Due to the legal duty of confidentiality, bailiffs do not have to provide information from enforcement proceedings by telephone or by replying to a regular e-mail without an electronic signature.

Once the debtor knows the current amount of the remaining principal, ie how much he has to pay during the Merciful Summer, he must do so as soon as possible (but not before 28 October 2021, at the latest by 28 January 2022). To the total amount in the amount of the principal, it is necessary to add the costs of stopping the execution, resp. the statutory amount of CZK 907.50 (CZK 750 + VAT).

If the debtor finds out that the principal has already been paid in full and the remaining debt is therefore only an accessory, he will send only CZK 907.50 to the executor to cover the costs of terminating the execution and notifying him that he is using Merciful Summer.

The last necessary step, which needs to be taken after repayment of the principal and legal costs, is to inform the bailiff that debtor has used the institute of the Merciful Summer. Best again in the form of a registered letter, in which you explicitly state that you want to use the Merciful Summer according to Part 2, Article IV, paragraph 25, of Act No. 286/2021 Coll. There is no special form by which the bailiff can be notified of the use of the Merciful Summer.

If all the above conditions are met, the bailiff will stop the execution and decide on the exemption from the payment of accessories. He should then issue a written decision on this without undue delay.

More information, advice, and specific recommendations are provided by experts in civic counseling centers at Caritas Czech Republic.

Legislation: Amendment to Act No. 286/2021 Coll., Amending Act No. 99/1963 Coll., The Code of Civil Procedure, as amended, Act No. 120/2001 Coll., On Bailiffs and Enforcement Activities (Endorsement Code) and the amendment of other laws, as amended, and some other laws.

Public officials

  • Czech Republic
  • territorial self-governing unit, including a city district or city district of a territorially divided statutory city or city district of the capital city of Prague
  • state-subsidized organization
  • state fund
  • a public research institution or public university
  • voluntary association of municipalities
  • Regional Council of the Cohesion Region
  • contributory organization of a territorial self-governing unit
  • an institute established by the state or a territorial self-governing unit
  • a non-profit company established by the state or a territorial self-governing unit
  • state enterprise or national enterprise
  • health insurance
  • Czech Radio or Czech Television
  • a legal entity in which the state or a territorial self-governing unit, itself or with other territorial self-governing units, has a majority ownership interest, even though another legal entity