In Croatia, a Foreclosure Law Like No Other

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No other country has a foreclosure law which can cause such dire consequences for debtors.

It is clear that the foreclosure procedures are the number one issue in Croatia. Of course, they exist in all countries, but there is no foreclosure law like in Croatia, which could be studied as an example of harmful consequences such a law can generate for the society, reports Večernji List on January 31, 2018.

The law allows for 100 kuna of initial debt to become 1000 kuna, and then only the sky is the limit. Such a law and the enforcement system based on it require decisive action and emergency intervention by the government which could reduce the damage. However, those in power are doing just the opposite. Last summer, with a lot of pomp about improving the position of debtors, they made only slight changes which do not pertain to most debtors. And now, the adoption of a new foreclosure law has been delayed, not by a month or two, but rather by more than a year.

Justice Minister Dražen Bošnjaković has been laconically complaining about the complexity of the issue for months, forgetting that 322,000 of his fellow citizens and their families are endangered by their extremely complicated debts. The Minister speaks about a working group for amendments to the law, which has hypertrophied just as much as the debts, but in three months since the establishment, it has met only once.

After his last public statements, the president of the Association of Citizens with Blocked Bank Accounts Miriam Kervatin resigned from the working group. “With regards to the statements by the Justice Minister, who said that Croatia had the best foreclosure law in the world, and due to the Ministry’s inactivity, since the working group has not met for three months, I hereby want to send a message I do not intend to be a ‘useful idiot’ for anyone,” Kervatin wrote in her resignation letter, adding that she did not intend to tolerate crimes committed by the Croatian foreclosure system.

She said that the Croatian foreclosure regulations must be urgently adapted in accordance with the legal and social standards of the European Union. She is ready to remain in the working group if the Minister and the government react promptly and by February 6 remove from the enforcement proceedings notaries and debt enforcement agencies, as well as all other actors who are not courts. She wants to suspend the foreclosure procedures led by these actors immediately, quoting the judgment of the European Court of Justice which stated that public notaries and debtor agencies could not be considered as courts.

The Association’s secretary Mario Strinavić was even more critical. “After the recent statements of Minister Bošnjaković, we can conclude that the government will not solve the problem of blocked citizens and that the only solutions which they want to offer are lifelong blockades of bank accounts, life in poverty, and a complete demographic breakdown,” said Strinavić. He added that media reports about alleged arguments between the President and the Prime Minister had become a disgusting charade, with them trying to create an appearance they are doing something, while in fact, their primary intent is to preserve the existing situation.

There are many absurdities in the Croatian foreclosure procedures. For example, endless blockade of bank account does not exist in any other EU country. The law did contain a provision that foreclosures for debts which cannot be paid should be automatically suspended after a period of time, but the provision is no longer in the law. There are also large additional payments which debtors have to make, so it is hard for them ever to start repaying the principal of their debts. There is no sanction for foreclosures initiated by mistake or without the proper delivery of documents. And, properties can be foreclosed for small debts of just 20,000 kuna.

Translated from Večernji List.


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