Fina Received 607 Requests for Initiating Extrajudicial Settlement Preceding Personal Bankruptcy

Since the beginning of this year, when personal bankruptcy was legally enabled, the Financial Agency (Fina) has received 607 requests for initiating extrajudicial procedures that precede the actual bankruptcy proceedings before the courts, of which 230 procedures have so far ended in unsuccessful agreements, according to the latest data from Fina. According to Fina’s data, from January 1 to September 12, 606 citizens and one craftsman, i.e., a person engaged in self-employment, requested the initiation of extrajudicial proceedings. The total amount of their reported obligations reached 266.9 million kuna.

As of September 12, 230 procedures ended with the issuance of a certificate of unsuccessful extrajudicial agreement. According to Fina’s data, the most such certificates, 57, were issued in the Zagreb counseling center, followed by the counseling center in Osijek with 27 issued certificates. Along with the request for initiating the procedure, the debtor must also attach a list of their assets and total unpaid obligations. From these lists, it appears that the individuals who requested the initiation of the procedure indicated that they have a total of 2,536 creditors, to whom they owe a total of 266.9 million kuna.

The most procedures were initiated in the counseling center in Zagreb – 322, followed by Osijek with 55, Pula with 38, Rijeka with 35, and Split with 21 initiated extrajudicial procedures.

Data on the amounts of reported obligations show that the largest amount, 99.35 million kuna of reported debts, falls to the counseling center in Zagreb, followed by the counseling center in Dubrovnik, where only six procedures were initiated, but the reported amount of debt exceeds 29.1 million kuna. In the counseling center in Virovitica, reported debts total 27.1 million kuna, in Osijek 22.6 million kuna, and in Pula 13.4 million kuna.

The law enabling personal bankruptcy – the Consumer Bankruptcy Act – came into force on January 1 of this year, and under it, this procedure can be requested by citizens or craftsmen, i.e., individuals engaged in self-employment, if they have fewer than 20 creditors, do not owe more than 100 thousand kuna, and no pre-bankruptcy or bankruptcy proceedings have been initiated against them.

Consumer bankruptcy proceedings are conducted by the courts, but the law stipulates that before initiating court proceedings, an attempt should be made to reach an agreement between the debtor and the creditor in an extrajudicial procedure, and this must take place in one of the 21 counseling centers within Fina in all Croatian counties.

The extrajudicial procedure lasts a maximum of 30 days from the date of the meeting specified in the invitation to participate and can exceptionally be extended for an additional 30 days, and after the expiration of the deadline, the counseling center issues a certificate to the consumer that the attempt to conclude an extrajudicial agreement was unsuccessful. Such a certificate is also issued in cases where any of the creditors, after the announcement of the invitation to participate, states that they do not wish to participate in the extrajudicial procedure, initiates or continues proceedings for the forced realization of their claim.