Small number of personal bankruptcies is not a sign that people have a lot of money, but only that this is still a new legal option which is unknown to many.
Since the beginning of this year, when the law enabled filing for personal bankruptcy, Financial Agency (FINA) has received 619 requests to initiate extrajudicial procedures which precede bankruptcy proceedings in the courts. According to FINA, the 619 cases included total debt of over 272 million kuna, reports Lider on September 20, 2016.
Of the total number of initiated extrajudicial proceedings, 229 of them have been concluded unsuccessfully. According to data, 58 such cases were concluded in Zagreb, and 28 in Osijek.
In addition to the request for initiation of proceedings, persons interested in declaring personal bankruptcy must submit a list of assets owned and their total debts. Submitted lists demonstrate that persons which have filed their requests had a total of 2,594 creditors and total debts of 272.03 million kuna.
The law which enabled personal bankruptcy entered into force on 1 January this year. It stipulates that the procedure can be started by citizens who have less than 20 creditors, do not owe more than 100,000 kuna, and for whom pre-bankruptcy or bankruptcy proceedings have still not been launched. Bankruptcy proceedings are administered by courts, but the law stipulates that, before initiating court proceedings, debtors have to try to reach an out of court settlement with their creditors. For this purpose, 21 so-called counselling centres have been established by FINA in all Croatian counties.
The extrajudicial procedure cannot last more than 30 days after the first meeting, but can be extended for additional 30 days in exceptional cases. After that, the counselling centre issues a certificate that the attempt to conclude an out of court settlement has not been successful. Then the proceedings move to the courts.
It was expected that many more people would use this opportunity to proclaim bankruptcy and get rid of some of their personal debts. However, the fact that the number of persons interested in declaring bankruptcy is so low unfortunately does not mean that people do not have financial problems, but only that the proceedings are still not known well enough. Also, some fine unacceptable the conditions they have to accept for their debts to be forgiven.
