ZAGREB, June 21, 2018 – At its session on Thursday, the government adopted a set of laws which, according to Prime Minister Andrej Plenković, are aimed at facilitating the position of citizens with blocked bank accounts – the draft law on writing off debts to physical entities, the draft law on the implementation of the distress procedure over financial assets, and draft amendments to the consumer bankruptcy law.
Explaining the draft law on writing off debts to physical entities, Finance Minister Zdravko Marić said that, at the end of March, there were 325,000 citizens with blocked accounts owing more than 42 billion kuna in total, and another 21 billion kuna in interest rates.
The government wants to give its contribution to efforts to solve this problem, Marić said, adding however that debts and obligations must be paid. He added that the government measure would help to instantly unblock the accounts of approximately 7,000 citizens.
The one-off execution of the law which will include all debts from the end of 2017, defines a group of creditors who are obliged to write off up to 10,000 kuna of the principle amount per debtor.
This group of creditors include the state, budgetary and extra-budgetary beneficiaries, state-owned companies, legal entities founded by the state and other legal entities in accordance with the Finance Ministry’s announcement. Another group of creditors includes local government and self-government units and other creditors such as telecommunication operators.
The finance minister explained that the debt that was written off would be recognised as a tax expenditure, which will stimulate them to follow the state’s example. This is a message of solidarity and the government wishes to encourage private creditors to do the same as they will get tax breaks.
The financial distraint bill is aimed at discouraging and restricting the seizure of money in citizens’ accounts, which has proven to be unsuccessful, and to stop the Financial Agency from seizing money if a claim has not been entirely collected in three years.
If the debt is not collected within three years since it was filed with the Financial Agency, the Financial Agency will automatically stop the distress procedure. This, however, does not mean that the debt has stopped existing but only that the distress procedure is non-implementable.
The chances to collect debts older than three years stand at 1.19% or less which is why the distress officer needs to assess the profitability of the distress procedure.
This measure will reduce the number of citizens with blocked accounts by over 71,000 and, together with the previous measure, it will reduce the debt by 32 billion kuna.
Justice Minister Dražen Bosnjaković explained that draft amendments to the law on consumer bankruptcy introduces a new instrument – fast-track bankruptcy proceedings – which will include citizens whose debt principal does not exceed 20,000 kuna and whose accounts have been blocked for over three years.
