Gov't okays set of draft laws to help citizens with blocked bank accounts

At its session on Thursday the government adopted a set of laws which, according to Prime Minister Andrej Plenkovic, are aimed at facilitating the position of citizens with blocked bank accounts -- the draft law on writing off debts to physical entities, the draft law on the implementation of the distress procedure over financial assets and draft amendments to the consumer bankruptcy law.

Explaining the draft law on writing off debts to physical entities, Finance Minister Zdravko Maric said that at the end of March there were 325,000 citizens with blocked accounts owing more than HRK 42 billion in total, and another HRK 21 billion in interest rates.

HRK 10,000 of principal amount to be written off

The government wants to  give its contribution to efforts to solve this problem, Maric said, adding however that debts and obligations must be paid. He added that the government measure would help to instantly unblock the accounts of approximately 7,000 citizens.

The one-off execution of the law, which will include all debts from the end of 2017, defines a group of creditors who are obliged to write off up to HRK 10,000 of the principal amount per debtor.

This group of creditors include the state, budgetary and extra-budgetary beneficiaries, state-owned companies, legal entities founded by the state and other legal entities in accordance with the Finance Ministry's announcement.

Another group of creditors includes local government and self-government units and other creditors such as telecommunication operators.

The finance minister explained that the debt that was written off would be recognised as a tax expenditure, which will stimulate creditors to follow the state's example.

This is a message of solidarity and the government wishes to encourage private creditors to do the same as they will get tax breaks, he said.

The financial distraint bill is aimed at discouraging and restricting the seizure of money in citizens' accounts, which has proven to be unsuccessful, and stopping the Financial Agency from seizing money if a claim has not been entirely collected in three years.

If the debt is not collected within three years since it was filed with the Financial Agency, the Financial Agency will automatically stop the distress procedure. This, however, does not mean that the debt has stopped existing but only that the distress procedure is non-implementable.

The chances to collect debts older than three years stand at 1.19% or less which is why the distress officer needs to assess the profitability of the distress procedure.

This measure will reduce the number of citizens with blocked accounts by over 71,000 and, together with the previous measure, it will reduce the debt by HRK 32 billion.

Fast-track bankruptcy proceedings to solve problem of citizens with blocked accounts

Justice Minister Drazen Bosnjakovic explained that draft amendments to the law on consumer bankruptcy introduce a new instrument -- fast-track bankruptcy proceedings -- which will include citizens whose debt principal does not exceed HRK 20,000 and whose accounts have been blocked for over three years.

(EUR 1 = HRK 7.38)

Text: Hina

News | Plenkovic Andrej