According to the Association of Slovak Collection Agencies, approximately 70% of people who file for personal bankruptcy would be able to partially repay their debts. Creditors, including state-owned companies, are thus losing millions of euros a year, the association warns.
To make personal bankruptcy fairer, Vice President Pavol Jakubov proposes introducing three changes: “Check the income and assets of applicants for debt relief retroactively for three years, introduce a so-called trial period during which the applicant must repay their debts at a specified rate from their income, and allow debt relief only after the trial period. In case of doubt, introduce an obligation for the debtor to prove their honest intentions.”
Bailiffs also encounter cases where debtors are capable of repaying their debts but prefer to file for personal bankruptcy. According to Stanislava Kolesárová, spokesperson for the Slovak Chamber of Bailiffs, they have been calling for changes for a long time. “If at least one enforcement proceeding has already been initiated against a person who wants to discharge their debts, it would be quite logical for the person who already knows the debtor’s financial circumstances to continue with the bankruptcy proceedings.”
Since October, a new regulation has been in force that makes bankruptcy proceedings and personal bankruptcies more transparent thanks to a new insolvency register. Barbora Škulová, spokesperson for the Ministry of Justice, adds: “Similarly, amendments have been introduced in the section on the liquidation of assets, which should contribute to more efficient satisfaction of creditors. Expert discussions are ongoing, and if conclusions are adopted, we do not rule out further amendments that would contribute to more efficient insolvency proceedings in accordance with European Union law.”
Lawyer Kvetoslava Žifčáková explains that, under the law, every insolvent person has the right to apply for debt relief. “For a debtor to file for debt relief, enforcement proceedings must be conducted against them. Debt relief is therefore intended primarily for those who find themselves in a debt trap and want to resolve their situation legally.”
An analysis by the Slovak Credit Bureau also shows that October saw the lowest number of debtors so far this year. However, according to the bureau, it is still too early to draw conclusions for the entire year.
Source: Rádiožurnál, Slovak Radio
