Personal bankruptcy requested by 1,212 citizens and 3 craftsmen owing 890 million kuna

Since January 2016, a total of 1,215 personal bankruptcy proceedings have been initiated in Croatia before the Financial Agency (Fina) counseling offices, with more than two-thirds of them, or 71.6 percent, ending in unsuccessful out-of-court settlements.

According to Fina’s data, from January 1, 2016, when the Consumer Bankruptcy Act came into effect, until August 6, 2018, 1,212 citizens and three craftsmen, or individuals engaged in self-employment, requested the initiation of out-of-court proceedings, with their debts reaching 890.8 million kuna.

Namely, along with the request to initiate proceedings, the debtor must also submit a list of their assets and total unpaid obligations, and Fina’s data shows that individuals who requested the initiation of proceedings have a total of 7,378 creditors, to whom they owe 890.8 million kuna.

>>>Fina: Personal bankruptcy requested by 1,204 citizens

The majority of proceedings, more than half, were initiated at the counseling office in Zagreb, which has 665 cases, accounting for 54.7 percent of the total number, followed by Osijek with 97 cases, Pula with 79, Split with 57, and Rijeka, where 52 individuals requested bankruptcy, according to Fina’s data.

Zagreb also accounts for the largest portion of reported unpaid obligations, around 428.8 million kuna or 48.1 percent of the total reported overdue unpaid obligations in all proceedings.

In terms of reported debts, Split follows with 114.9 million kuna or about 12.9 percent of all reported unpaid obligations.

The amount of debt in proceedings initiated at the counseling office in Osijek is 62 million kuna, followed by the counseling office in Zlatar, where approximately 47.5 million kuna in debts was reported in 23 proceedings, according to Fina’s data.

>>>Fina: Initiation of personal bankruptcy requested by 1,102 citizens

Zagreb also issued the most certificates of unsuccessful out-of-court settlements – 417 out of a total of 871.

The law enabling personal bankruptcy – the Consumer Bankruptcy Act – came into effect on January 1, 2016, and under it, this procedure can be requested by citizens or craftsmen, or individuals engaged in self-employment.

Justice Minister Dražen Bošnjaković recently presented the first working version of a new enforcement law that would return enforcement based on credible documents to the jurisdiction of the courts, with public notaries participating in the process only as court commissioners.

>>>Minister Bošnjaković: We are returning enforcement to the jurisdiction of the courts

The innovations proposed in the draft by the working group should also introduce greater protection for debtors, reduce the costs of enforcement proceedings, abolish the possibility of fiduciary registration of ownership on the debtor’s property, improve electronic communication, increase delivery security, expand the circle of exemptions from enforcement, introduce an obligation to notify debtors about the initiation of enforcement, and prohibit evictions during the winter months.

It is expected that work on the new law will be completed by the end of the year, after which government and parliamentary procedures will follow.

According to the minister, the lowest cost of enforcement proceedings should be 300 kuna, instead of the current maximum of over 1,800 kuna. He also stated that the courts have sufficient capacity for additional work and that the notaries in the working group did not object to the reduction of powers.