Since the start of this year, when legislation enabling individuals to declare bankruptcy took effect, as many as 473 applications for personal bankruptcy have been filed with the state-run Financial Agency (FINA).
Filing personal bankruptcy precedes proceedings to that effect before courts, according to FINA's report issued on Monday.
The new legislation on consumer bankruptcy went into force on 1 January 2016, and the law is perceived as an attempt to give over-indebted citizens a chance for a fresh start and offer them an opportunity to repay debts in a controlled manner.
All insolvent persons, that is individuals and micro business owners, can file for bankruptcy if for three straight months they have not been able to pay their debts which exceed HRK 30,000. The upper limit of the debt for this type of bankruptcy proceedings is HRK 100,000.
Before filing for bankruptcy, a debtor first has to attempt to settle with the creditors out of court before a FINA advisory body, but if no agreement is reached, the proceedings continue in court, with the consumer getting another chance to settle with the creditors. If no court settlement is reached, the court appoints a trustee to divide the consumer's estate and represent a bridge between the court, the consumer and the creditors.
According to FINA, 472 individuals and one micro business owner have filed for personal bankruptcy so far.
Their debt on aggregate is 189.6 million kuna, and the number of their creditors stands at 1,703, but these figures can change if some new creditors appear in the proceedings.
(EUR 1 = HRK 7.5)