{"id":6755,"date":"2019-01-08T06:46:51","date_gmt":"2019-01-08T05:46:51","guid":{"rendered":"https:\/\/praguebusinessjournal.com\/?p=6755"},"modified":"2019-01-08T06:46:51","modified_gmt":"2019-01-08T05:46:51","slug":"democracy-under-threat-from-rising-debt-crises","status":"publish","type":"post","link":"https:\/\/praguebusinessjournal.com\/democracy-under-threat-from-rising-debt-crises\/","title":{"rendered":"Democracy ‘Under Threat’ From Rising Debt Crises"},"content":{"rendered":"

Snowed under with debts from a failed business, Renata\u2019s hands shook as she told a tale of financial misery that drove her to contemplate suicide and visited fear on her aging parents.<\/p>\n

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\u201cI was so scared of the debt collectors because they were coming to my parents\u2019 house,\u201d she said, depicting a nightmare scenario as hungry creditors closed in. \u201cIf you are a debtor here, the state criminalises you, worse than if you\u2019re a real criminal. Even a murderer can be released early with good behaviour. I didn\u2019t kill anyone or hurt anyone, I didn\u2019t want my business to collapse \u2013 but I will not be free until the end of my life.\u201d<\/p>\n

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Renata\u2019s harrowing experience mirrors a mounting personal debt crisis in the\u00a0Czech Republic<\/a>\u00a0that is undermining one of Europe\u2019s most flourishing economies by driving workers into the shadow economy to evade aggressive debt collectors.<\/p>\n

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Now Czech MPs are under pressure to enact emergency legislation that could provide an escape route for the country\u2019s vast army of debtors. They will vote on a radical new bankruptcy law this month after the Czech senate rejected an earlier proposal as too weak to tackle a crisis that critics say has left a trail of blighted lives and broken marriages.<\/p>\n

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Renata, 54, is typical. Withholding her last name to shield her family and her five-year-old daughter, she described losing her home and possessions and enduring marital separation after the small building company she ran with her husband in a village near Prague went bust following the 2008 global financial crash, saddling her with bills she could not pay and allowing debt agencies to seize her property.<\/p>\n

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\u201cIt has completely ruined my life,\u201d she said, sitting in a cafe in the industrial city of Kladno, 18 miles north-west of Prague. \u201cIt\u2019s hopeless. There is no light at the end of the tunnel. I\u2019d like to repay some of the debt, but I\u2019ve no money or property. And I need to care for my daughter.\u201d<\/p>\n

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Renata owes around 7m Czech koruna (\u00a3245,000) according to 34 separate debt recovery notices tabled by different private bailiff companies, some of which have repeatedly harassed her parents for money. Compounding her problems is what experts say is one of Europe\u2019s most stringent insolvency laws, restricting bankruptcy to those able to prove they can pay 30% of their debts \u2013 impossible on her meagre income as a part-time bookkeeper. It is this law that MPs are being urged to reform.<\/p>\n

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Renata is just one of 863,000 Czechs \u2013 out of a population of 10.6 million \u2013 facing paralysing demands after debt collectors ordered their bank accounts frozen and their incomes slashed on behalf of creditors determined to pursue outstanding dues regardless of ability to pay. Some 150,000 people have 10 or more outstanding debts for amounts they can never hope to pay. Many face inflated fines for not having valid tickets on public transport, often when they were children. Around 6,000 Czechs face debts from fines incurred when they were minors, mostly for being caught on trams or metro trains without tickets.<\/p>\n