Personal Bankruptcy (Oddlužení)
Do you have a steady income but can no longer keep up with your debt repayments on your own? Personal bankruptcy can open the door to a life free of enforcement after three years.
Free consultation →What I will do for you
A personal bankruptcy petition must be flawless from the start, an error or omission can mean its rejection and a loss of time. I will assess your situation, prepare the petition, and represent you throughout the entire insolvency proceedings.
- ✓Assessing whether you meet the conditions for personal bankruptcy
- ✓Drafting and filing the insolvency petition combined with the petition for permission of personal bankruptcy
- ✓Representation in insolvency proceedings for the whole duration of the bankruptcy
- ✓Resolving complications: multiple enforcements, disputes with creditors over the amount of debt
- ✓Explaining the impact on your assets and income in advance, with no surprises
- ✓An honest assessment of whether personal bankruptcy is even worth it for you
The conditions for personal bankruptcy after the 2024 amendment
The amendment to the Insolvency Act (Act No. 252/2024 Coll.), effective from 1 October 2024, fundamentally simplified and shortened personal bankruptcy. For insolvency proceedings opened after that date, the following applies:
- ✓Personal bankruptcy lasts 3 years for all debtors, previously this shortened period applied only to seniors, people with a 2nd or 3rd degree disability, or debts arising in childhood, everyone else went through 5 years of personal bankruptcy
- ✓The earlier rules on 30%, or 60%, repayment have been abolished, the court now only assesses the debtor's maximum effort and sets the repayment amount according to your real ability to pay and your income
- ✓The requirement of honest intent remains (Section 395 of the Insolvency Act), the court examines throughout whether you are hiding income or assets
- ✓The period after which you can apply for personal bankruptcy again has been extended from 10 to 12 years
Who qualifies for personal bankruptcy and how it works
Under Sections 389 and 395 of the Insolvency Act, you must have debts owed to at least two different creditors that are more than 30 days overdue, and at the same time an income that covers at least the insolvency trustee's fee and a reasonable amount for the creditors. Proceedings begin with the filing of an insolvency petition combined with a petition for permission of personal bankruptcy, the court rules on the insolvency and permits personal bankruptcy in the form of a repayment schedule combined with monetization of the estate (by far the most common method in practice, the second statutory option is bankruptcy through monetization of the estate alone). After successfully completing the three-year phase, the court decides to discharge you from paying the remainder of your debts.
Watch out for the so-called Merciful Summer debt amnesty: there is currently no wave running, the last one took place in 2024 and no further one has been announced or planned. Anyone waiting for its return is only wasting time during which they could have started resolving their debts another way.
What personal bankruptcy means for your assets and income
Under a repayment schedule combined with monetization of the estate, income above the protected amount goes toward repaying creditors, work out the exact figure for your income in the protected amount calculator. Basic household equipment, as defined by the Code of Civil Procedure, is not monetized, more valuable unencumbered assets are. During personal bankruptcy you must regularly report your income to the insolvency trustee and the court, undeclared work or concealed income are grounds for the bankruptcy to be cancelled for dishonest intent.
A lawyer, or an accredited person?
Under Section 390a of the Insolvency Act, a petition for permission of personal bankruptcy may only be drafted and filed by a lawyer, an insolvency trustee, an enforcement officer, a notary, or an accredited person registered with the Ministry of Justice. Accredited persons provide the drafting free of charge, but they are often stretched thin, handling a large number of clients at once. A lawyer's fee is strictly capped by law, at most CZK 4,000 excluding VAT, or CZK 6,000 excluding VAT for the joint bankruptcy of spouses, and this amount also covers the consultation and correcting any deficiencies in the petition.
For a simple case with one employer and a handful of debts, a free accredited person may well be enough. I recommend a lawyer where the situation is more complicated: multiple enforcements, a disputed claim, a business debt, or a concern that the petition will be rejected on formal grounds. If you cannot afford a lawyer at all, turn to an accredited person or a free debt counselling service, both are legitimate options and are sometimes entirely sufficient.
Who will handle your case
Ing. Mgr. Tomáš Beneš
Attorney registered with the Czech Bar Association, based in Prague.
Law degree from Charles University. I focus on business law, real estate and employment disputes. I handle every case personally, no assistants.
More about me →How we will work together
Describe your case
Fill in a short form or send me an e-mail. A few sentences about what happened and what you need to resolve are enough.
Send your documents
Attach the relevant documents (contracts, correspondence, notice of termination…). I accept everything securely online.
We'll discuss it by phone
I will study your case and call you within 48 hours with a proposal for the specific next steps, including the price.
You'll receive the solution by e-mail
You will receive the contract, filing or legal analysis by e-mail. Everything is done quickly and without unnecessary meetings.
Considering personal bankruptcy?
Describe your situation. You will get a concrete answer within 48 hours on whether and how personal bankruptcy could work for you, completely free of charge.
Free consultation →