The Czech state exempts debtors involved in a debt collection process from debt interest, legal fees related to debts or penalties, all of which are referred to as “incidental costs” to the debt if the creditor is a public body, on the condition that the Between October 28, 2021 and January 28, 2022, the debtor has paid off the main amount for the original claim in full to the debt collection agent. The “Summer of Mercy” measure, passed by Parliament in July, will give creditors access to bad debt revenues and allow debtors to repay debts that they have not paid back due to the high ancillary costs.
Tens of thousands of people will have a chance to return to normal life when they pay off their debts. The phrase “summer of mercy” refers to a concept mentioned in the Bible.
In ancient times, such debt cancellations were announced every 50 years, which meant that the debt would be completely canceled that year. In the Czech case, the “summer” takes place in the autumn and winter of 2021-2022 and does not mean that all debts will be canceled, but the disproportionate increases in the original claim will be canceled if the main claim is paid on time.
An example of such a debt is the fines that are levied for traveling on public transport without buying a ticket. A locally imposed fine of 1,500 CZK [EUR 60] for non-payment of this or any other fine, for example, it can increase up to CZK 60,000 [EUR 2 400] through other fees or 40 times the amount originally owed.
When a debtor has more than one such fine, amounts that were initially negligible can be turned into debt that the person could never pay off in his lifetime. “Summer of Mercy is a unique opportunity,” said Daniel Hůle, debt expert for People in Need, on Czech television’s 168 Hours program.
“I can’t remember such an opportunity in recent years for people who choose to pay off their debts and want to do so,” said Hůle. Martin Šimáček from the Institute for Social Inclusion said: “Those who have access to Summer Mercy Aids are now trapped.”
“What they owed the public institutions was a small amount of money, but the incidental costs of that debt were so excessive that they were unable to pay off the debt and function normally, essentially means a second chance to function normally and one to have a normal income, “said Šimáček.
“This entire debt mechanism was backed by the government itself when its legislation helped this business get into debt. Those who owe tens and hundreds of thousands of kronor in utility costs today started with only small, insignificant debts, ”remarked Šimáček.
“The headmaster himself was a fairly small amount of money. All of this is a burden that is borne not only by each individual, but by the whole country,” said Šimáček.
The prerequisite is that the debtors know how much they owe the client and pay this to the debt collection agent in the period from October to January together with a processing fee of CZK 750 plus VAT or CZK 908 [EUR 35], and the Summer of Mercy only applies to debts owed to public institutions, which then have hired commercial debt collection agencies to collect the debts owed. This can include debts towards the state itself, towards the statutory health insurance, towards the private-public development cooperation provider, towards the electricity company. be Pražská energetika, to the gas company Pražská plynárenská, to the Mostecká bytová Management company for apartments owned by the municipality of Most, other majority-owned companies, public transport companies established by municipalities or directly to local authorities for rent, waste disposal and dog registration.
Notes on application
1. Find out how much of the principal you still owe the debt collection agent and inform them of your intention to use the Summer of Mercy. This needs to be done as soon as possible, especially if more than one collection is in progress. It can take up to 30 days to get a response from the debt collection agency. Contact the debt collection agency by registered mail and request a calculation of the amount actually still owed.
2. As soon as you know the amount of the unpaid principal, deposit it into the account of the debt collection agency. You also have to pay the one-time fee of 908 CZK [EUR 35]. In addition to using the correct variable symbol for this payment, it is necessary to write “Summer of Mercy” on the payment slip. The receipt of payment between October 28, 2021 and January 28, 2022 must be shown on the account of the collection agency.
3. Finally, check whether the payment was successful. Collection agencies are obliged to issue a decision based on the payment made that releases the debtor from the obligation to pay the balance (beyond the client).