We would like to inform you about a significant amendment of Czech Procedural Code and the Code of Execution. This amendment was adopted by the Chamber of Deputies of the Czech Republic on 7th July 2021, as amended by the amendments of the Senate of the Czech Republic. It now only needs the signature of the President of the Czech Republic in order to come into force.
From 1.1.2022, the following changes which have a fundamental effect on the position of entitled persons in execution proceedings will become effective:
1) Row order in distribution of recovered revenues
- At present, the revenues recovered in execution proceedings are first credited to the debt service, i.e. interest, default interest, costs, and afterwards to the principal itself.
- Newly, the revenues recovered in the execution proceedings will be first credited to cover the costs of the court for the enforcement of the decision, afterwards to the principal and at last to interest, default interest and the costs of the creditor.
2) Ending of unsuccessful executions
- Another fundamental change is the termination of unsuccessful execution proceedings which are pending for more than 6 years. In case no revenue has been recovered after 6 years nor has any immovable property owned by the debtor been seized, the bailiff invites the creditor to pay a deposit. If the deposit is not paid, the bailiff will terminate the execution proceedings.
- Otherwise, the execution proceedings will be conducted for another 3 years and the proceedings can be extended twice by such periods.
- The above-mentioned period of 6 years will be calculated retrospectively, i.e. the first execution proceedings will be terminated as early as 2023.
3) Restrictions on mobile executions
- The bailiff will have to postpone the execution of the sale of movable property, if the debtor proposes to repay according to a payment schedule.
- However, this point of the amendment applies only to natural persons, not to legal entities.
4) Ending of trivial executions
- In case the principal is up to an amount of CZK 1,500 and nothing has been recovered in the last 3 years, the bailiff invites the creditor to make a deposit, no later than 3 months after the coming into force of this amendment to the Act. If the creditor does not pay the deposit, the execution proceedings will be terminated.
- However, in such cases, the creditor may subsequently claim a part of the claim as a tax credit.
Do not hesitate to contact us in case of any questions.