Although they have not yet adopted all the necessary by-laws to begin implementing the Consumer Injury Act, which has been in place since the beginning of the year, Fina has so far received 40 requests to initiate out-of-court personal bankruptcy proceedings, which citizens have been blocked longer than 90 days, and can not pay due debt greater than 30.000 kuna.
In order for the proceeding to commence, the Ministry of Justice would have to adopt eight by-laws by the end of January, and the Government decree on determining the criteria and manner of calculating and paying the remuneration to trustees involved in court proceedings.
The Ministry has so far adopted two regulations
The Ministry has so far adopted the Ordinance on the content and form of the forms for submitting submissions in the out-of-court procedure and the bankruptcy procedure of the consumer, and the Rulebook on Conditions for obtaining a permit for conducting the counseling work and the manner of work of the counseling center at Fini, and subsequently issuing permits for mediators in counseling centers for 44 Fine Workers who have undergone the required training.
By the end of the month, it would be necessary to adopt rules on the content and form of the forms, the conducting of the counseling center and mediator's records, the conduct of the consumer bankruptcy register, the list of trustees and their training, the manner of their choice by random selection,
They point out that none of the nine implementing regulations could have been passed prior to the entry into force of the law itself.
By the latest data, in November, 2015. in blockade there were 324.350 citizens, whose debt amounted to 36,33 billions or 1,5 percent more than the previous month.
Law critics came to their own
Law critics, headed by the leaders of the Association of Blocks and Unions, have now come to their own because they feel they were right when the law was rated bad and claimed that it would take time for it to be implemented or that Croatia would once again a serious problem was obtained by a semi-legal solution.
The president of the Independent Croatian Trade Unions Krešimir Sever warns that the assumption of reprogramming debt management is a debt management, which consumers themselves will not be able to work on.
The law on consumer bankruptcy makes sense only if debt management is provided with expert assistance and simultaneous education on financial management, says Sever, who considers that the key relationship between the creditor and the debtor, ie the equality he is obliged to provide the state, both for legal reasons and for for economic reasons.
The president of the Croatian trade unions association Ozren Matijašević, who is the advocate of personal bankruptcy law, sees his weakness in the institution of the mediator, that is, it does not specify where those persons are acquiring knowledge and how much they will be. Given the large number of blocked, it is questioned that the law will be implemented without the sufficient number of educated and appointed mediators.
Personal bankruptcy is the ultimate measure
Personal bankruptcy or consumer bankruptcy is conceived as the ultimate measure preceded by a few steps, and can only be run by a consumer. The first is obliged to conclude an agreement with the creditors in the out-of-court procedure, in front of the Fine counseling center with the help of an intermediary, and if this fails, the proceedings will continue in court.
A court settlement can also be reached, but if that fails, the court will appoint a trustee representing a bridge between the court, consumers and creditors, and will play a key role in distributing consumer assets.
The law provides that the period after the declaration of personal bankruptcy may not be shorter than one and for more than five years. In that period, consumer debts are trying to sell by selling his property, exceptionally it does not apply to the only real estate he lives in, and after five years the remaining debt is cleared.
For that time, the consumer would have to report to the trustee all changes related to his property, he would have to try to find a job if he did not, accept seasonal jobs if he was qualified for them, and report any inheritance gains into the bankruptcy estate.
According to the estimates of the Ministry of Justice, FINA's out-of-court procedures could be about the 20.000 people, while 2000 and 3000 could end up in bankruptcy in the court.
Average debt of 100.000 kuna
With Fine, the average debt for one of 324.000 blocks is 100.000 kuna.
Estimates say that debtors who declare bankruptcy could repay about half of their debt, so critics ask, whose burden will be the other half. If, for example, annotating 3000 personal bankruptcies, and by selling debtors' assets covering half of the debt, or 50.000 kuna per person, the redeemed debt would amount to approximately 150 million.
Therefore, at the time of the adoption of the law by the Croatian Association of Banks, they complained to the Government that the outstanding debts were not fully approached, but the problem was solved at the level of various ministries, so their special projects presented the branches of finance and social welfare. They also warned that personal bankruptcy is an undesirable outcome, so it should not be a goal for many people to go there.
The blocked association says the government ignored her initiatives and suggestions and reminds her of 2011. either 79.000 blocked citizens with a total debt of six billion kuna, which grew in four years for 5,5 times.
The blocked claim that every fourth employee and every ninth active active resident are blocked in Croatia, and as one of the causes cited legalized interest rates.
By their data, more than 300.000 blocked lives with less than 2500 kunas per month. Of that amount, a third is blocked, which means that the family per month lives less than the 1600 kuna, which is not enough for basic costs, let alone decent life.
Examples of other countries
The Institute of Personal Bankruptcy is a new term in most European Union countries, while in America there is a long term. Some countries such as Great Britain, France, Ireland, Germany and Slovenia offer the possibility of bankruptcy for the individual, while some like Italy do not have such a solution at all. Ireland and Spain do not foresee the possibility of write off debts and citizens remain in bankruptcy until they cover their debts.
The Institute of Personal Bankruptcy in Slovenia was introduced eight years ago, since then their number is increasing every year, so only at the courts in Ljubljana were invested more than 2000 such requests.
Often bankruptcy is required by small entrepreneurs, sometimes even publicly known people who are in difficulty, but there have also been cases when some members of the business elite have been asked.
Personal bankruptcy is decided after criminal prosecution and some bad business decisions, so among the Slovenes there is a belief that it is an institute for those with good legal advisers, because in that case the property can be hidden from a forced bankruptcy manager.
Due to personal bankruptcy Slovenian budget without a dozen million euros
It is estimated that due to the personal bankruptcies declared, the Slovenian state budget is not worth ten million euros a year.
In Austria, the term "personal insolvency" means a special procedure for declaring insolvency for all natural persons (and not for companies), regardless of whether they are a private person (including former entrepreneurs) or individual entrepreneurs.
Unlike the Croatian solution, there is no need to pay an advance in Austria for the costs of the procedure and as a rule there should be no commissioner, which makes the procedure cheaper. The procedure for declaring insolvency may be requested by both the borrower and each creditor.
Private individuals are required to try to reach out-of-court settlements and contact the advisory service for debtors. If a debtor has repaid a 50 percent of debt within three years or at least 10 percent within seven years, he is relieved of the remaining debt.
In Germany, only one to two percent of the over-indebted, who can not settle the obligations, decides on personal bankruptcy.