You are in complete control of your financial situation, you don’t owe anything and if you do, you pay it off properly. The insolvency record is therefore something you are not interested in at all. But maybe it should. It is a very practical tool that can be useful to all of us. Let’s talk about why you should be interested in it, what you can find in it and how to search it. We will also address common myths and questions associated with the index.
“I borrowed from the bank. Is that why I’m on the debtors’ register?“
“A friend I did business with claims I owe him money and has taken me to court. Now he’s going to get me in trouble and on the insolvency register.“
The term “debtors’ register” is quite general and the public tends to refer to various types of registers, including insolvency registers. In fact, there are several registers dealing with some form of debt and it is always necessary to distinguish which one is being referred to. In general, however, not all ‘debts’ and not all ‘debtors’ are entered in the insolvency register. You can therefore take out a consumer loan, mortgage or other similar loan and you will certainly not have a record there.
Similarly, if there are ordinary court proceedings in which a sum of money is being recovered, these are not insolvency proceedings that would be entered in the insolvency register. Nor does it apply to foreclosure, which is also sometimes confused with insolvency. Enforcement is the judicial recovery of a specific payment that the debtor does not want to voluntarily repay, although his assets would be sufficient to meet the debt. Executions are entered in the Central Register of Executions.
The Insolvency Register exclusively collects records of entities within the Czech Republic that are undergoing so-called insolvency proceedings. This is a special type of court proceeding for cases where someone has, in the vernacular, “grown out of his or her head” and is therefore unable to meet his or her financial obligations in the long term. The insolvency procedure allows the debtor to settle his debts, so that he can start with a clean slate and at least partially settle the claims of his creditors.
Tip: Do you have unpaid invoices on your desk? According to IPSOS, over 89% of businesses have dealt with a similar problem. And one in five have even experienced a situation where their invoice was not paid at all. Have you been in a similar situation? We’ll advise you on how to deal with overdue debts so that you can get your money back as soon as possible. What is the procedure and what to look out for? That’s what we’ll look at in today’s article.
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In the first half of 2021, for example, 13,153 new insolvency petitions were filed in the Czech Republic. Surprisingly, this is a 13% drop compared to the same period last year, despite the ongoing covide and its significant impact on the economy.
The Insolvency Register is managed and operated by the Ministry of Justice and can be found on the website https://isir.justice.cz. The database is publicly accessible to all and searching for information in it is free of charge.
It contains records of natural persons (business and non-business) and legal entities. For each registered person, there is information about the person itself (i.e., depending on the nature of the entity, ID number, registered office, birth number, place of residence), as well as the date and reason for initiating insolvency proceedings.
One file is kept for each debtor, in which they are entered:
Tip: Other registers operated by other public or private entities should be distinguished from the insolvency register. The most important of these are the aforementioned Central Register of Executions, operated by the Chamber of Executors and SOLUS, where information on unpaid claims is shared between different economic sectors. These include, for example, banks, building societies, non-bank financial institutions, telecommunications service providers and energy distributors.
“I’m not a businessman. Why do I need an insolvency register?“
The fact that you are not a businessman and do not sign traditional business contracts does not mean that you do not conclude any “deals”. Every purchase on the internet, every order with a craftsman constitutes a contract and in some cases it is worthwhile to accompany them by consulting the insolvency register.
The Insolvency Register is a valuable tool not only for creditors, debtors and insolvency practitioners, but also for employers, entrepreneurs, landlords and generally anyone entering into any legal relationship with persons they do not know intimately.
For example, employers sometimes screen job applicants. Such “vetting” can be useful if they want to entrust a person with financial work, banking advice or financial management. They assume that a person who has not been able to manage his or her debts is usually not suitable for such work.
Similarly, it is a good idea for anyone to consult the insolvency register if they wish to enter into a sale or purchase from another person, for example, a property free from legal defects. But caution pays off even for much less expensive items than buying a home.
Tip: We have also covered a similar topic in the article Buying a flat in foreclosure.
“I need to find who all “my” debtor owes. Can I find it in the register?“
If the insolvency petition is filed by the debtor, the debtor is obliged by law to list all creditors to whom it owes money. So this information can be found in the register. A plurality (i.e. at least two) of creditors is also a condition for the opening of proceedings, so at least one other creditor exists. If one of the creditors has filed a petition, it depends on which other creditors have filed their claims.
Searching the register is easy if you know some basic information about the person you want to check. For example, you can enter your name and surname, birth number, and in the case of legal persons, the company registration number or the company name.
If you can find the person in the register, you can open their file (or the online version of the file, which may not be exactly the same as the physical file) and see a list of the filings and orders relating to their case. For each such record, you can see when it was made and you can also click on the full text of the record.
Records are kept in the register not only during the insolvency proceedings but also for five years afterwards. This period cannot be shortened or waived in any way. Only the insolvency court has the power to delete them.
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