ZAGREB, April 28, 2018 – The government will move three bills, on the write-off of physical persons’ debts, on financial distraint, and amendments to the Consumer Bankruptcy Act to facilitate the position of citizens with blocked bank accounts and ensure a decrease of their debt, Prime Minister Andrej Plenković said on Friday.
When the bills are enacted, the number of citizens with blocked accounts is expected to drop by more than 80,000 and their total debt by more than 33 billion kuna.
As of March 31, there were 325,254 citizens with blocked accounts owing 43.37 billion kuna in total, Plenković said at a press conference.
The bill on the write-off of physical persons’ debts will make it possible to write off debts whose principal is up to 10,000 kuna, owed to the government and state-owned companies, which will result in 11,000 citizens having their accounts unblocked. This is a message of solidarity and we wish to encourage private creditors to do the same as they will get tax breaks, Plenković said, calling on banks, telecoms, credit card companies and credit unions to show social responsibility for citizens whose accounts have been blocked for a long time.
He also announced a stimulating tax debt rollover model.
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, Plenković said.
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, he added.
The bill of amendments to the Consumer Bankruptcy Act is targeted at citizens whose accounts have been blocked for over three years and whose debt principal does not exceed 20,000 kuna, Plenković said, adding that there were 80,000 such citizens as of March 31. He said the amendments would allow citizens with blocked accounts to contest bankruptcy and prevent the sale of real estate if the debt capital was below 20,000 kuna.
Plenković announced the adoption of a new distraint law and said the measures presented today would result in more efficient collection. The provisions will be put to public consultation, he added. The government plans for parliament to enact the three bills by July 13.
Finance Minister Zdravko Marić said citizens owed the most to banks, or 43% of the total debt, and most had their accounts blocked over debts to telecoms.
The largest number of citizens, about 100,000, owe less than 10,000 kuna, while 4,694 owe more than one million kuna each, over 22 billion kuna in total or over 50% of the total debt. Ninety-seven percent of the debts are long-standing and only 365 citizens have had their accounts blocked for less than a year, said Marić.
Justice Minister Dražen Bošnjaković said the bill of amendments to the Consumer Bankruptcy Act was moved to simplify the bankruptcy procedure as the current law did not yield the expected results. The amended law will apply to debts exceeding 20,000 kuna and accounts blocked for over three years, he added.
