While the Czech government has not yet enacted the June 2019 EU Directive on restructuring and insolvency, it has proposed another debt relief measure, the Milostivé léto or 'Debt Jubilee'. This will give debtors the opportunity to discharge debts owed to the Czech state.
The measure will provide relief for debts where interest repayments substantially exceed the principal amount. The measure follows on from the previous 'Debt Jubilee' between 28 October 2021 and 28 January 2022 when 42,000 debt enforcement proceedings were cancelled.
As the cost of living rises in the Czech Republic, the 'Debt Jubilee' should, according to the legislators, alleviate the pressures on debtors stuck in debt traps and allow for a new start.
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To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team.