Debt discharge for insolvent Czech entrepreneurs under the EU Directive 2019/1023
Debt discharge for insolvent Czech entrepreneurs under the EU Directive 2019/1023

Author(s): David Machač
Subject(s): National Economy, Business Economy / Management, Law on Economics, Financial Markets, Socio-Economic Research, Sociology of Law
Published by: ADJURIS – International Academic Publisher
Keywords: creditor satisfaction; direct effect; discharge of debts;
Summary/Abstract: The Directive (EU) 2019/1023 requires Member States to ensure that insolvent entrepreneurs have access to at least one procedure that can lead to a full discharge of debts in a period no longer than three years. The deadline for transposition of the Directive 2019/1023 expired on 17 July 2021. The payment schedule according to the Czech Insolvency Act generally lasts five years. It is shortened to three years for some vulnerable groups of debtors, such as disabled or elderly people, and also for those who repaid 60% of debts within the first three years. This paper shall examine the consequences of not meeting the deadline for transposition, and whether Directive 2019/1023 could have a direct effect, based on the judgments of the Court of Justice of the EU (CJEU). The approach taken by the government’s proposal for an amendment to the Insolvency Act which is currently pending in the legislative process shall also be addressed in this paper.

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