Prague, July 26 (CTK) – Problems related to over-indebtedness and debt traps still persist in the Czech Republic, which lacks legislation needed to improve the situation and where rules in this area tend to be shaped by courts only, according to a report on the state of human rights in the country for 2017.

The cabinet is to discuss the report on its next meeting.

A map of distraints shows that execution was faced by 863,000 Czechs, i.e. nearly 10 percent of the population, last year.

Out of them, almost 500,000 faced three or more distraints.

“Many of those people owe so high sums that they cannot repay them until the end of their lives. Their debts are so high that the people even cannot reach the launch of personal bankruptcy, as it requires the repayment of 30 percent of the debt in five years,” the report says.

The map of distraints has been completed by the Open Society and the Ecumenical Academy NGOs.

In 2017, the number of people afflicted by distraints increased by 31,000 as against the preceding year.

The situation deteriorated in 12 of the country’s 14 regions. In the north Bohemian Usti Region, distraints were faced by 18 percent of inhabitants over 15, in the norhtwestern Karlovy Vary Region 17 percent and in the Liberec Region, elsewhere in north Bohemia, by 12 percent.

A total of 151,000 people each simultaneously faced more than ten distraints.

The distrained assets together amounted to 239 billion crowns last year. Ninety percent of the distraints are never possible to enforce, the map’s authors said.

A half of the distraints arose over a sum below 10,000 crowns. The huge debts in question thus consisted mainly of additional costs, expenses, fees, interest and default fine.

Many people got indebted, for example, because their income dropped during a period of illness or because their partner failed to pay maintenance to them.

The situation is advantageous to no one, the report says.

“Practically until the end of their lives, the debtors leave the legal labour market, where all their incomes would be immediately confiscated. Employers are burdened with the administrative procession of distraints. The state loses the revenues from the relevant income taxes and social and health insurance, and on the contrary, it is forced to support these people with social benefits. The creditors face a loss as well,” the report writes.

It says the procedure of personal bankruptcy gives the creditors a chance to see at least a part of the debt repaid, while the debtor does not lose motivation to work.

However, politicians still fail to reach consensus on extending the rules to make personal bankruptcy accessible to a broader group of debtors.

Draft amendments that proposed the abolition of the condition of the repayment of 30 percent of the debt or the possibility of a merger of a person’s debts failed to make it through parliament last year. Only the law on insolvency was amended, the report says.

A systematic education and enhancement of people’s financial and legal literacy have been developing only slowly, it says.

“As a result, the distraint-related issues have mainly been shaped by courts within their operation,” the report writes, mentioning some cases that were important in this respect last year.

The annual reports on the state of human rights have been drafted by the secretariat of the Government Council for Human Rights since 1998.

Last year, the UN subjected Czechia to a regular human rights check and addressed 201 recommendations to it, which concerned, among others, the integration of Roma and migrants in Czech society, inclusion in education, gender equality, unlawful sterilisations and an excessive number of children in children’s homes and other institutions.

The Czech cabinet supported 177 out of the UN recommendations and took note of 24.