Over 2,000 Czech children face property seizure over unpaid debts

More than 2,000 children in the Czech Republic are still threatened with a distraint order over unpaid debts, despite a new amendment to the Civil Code that prevents minors from falling into debt. Psychologists warn that it can have a serious impact on their mental development.

Most of the children’s debts in the Czech Republic that originated in the past were caused by unpaid fines for fare-dodging, unpaid hospital fees, telephone bills or library fines.

When their parents forgot or refused to pay, the debt was passed on to bailiffs, who imposed interest charges and various forms of penalties, causing the initial sum to increase many times.

An amendment to the Civil Code, which came into force in July this year, transferred the responsibility from children to their parents or other legal representatives, making it impossible for minors under the age of 15 to fall into a debt trap.

However, Daniel Hůle from the NGO People in Need says the new legislation doesn’t deal with debts that originated prior to that date:

“The amendment effective from July 1 will certainly help in the future, because it clearly specifies conditions under which child foreclosures can arise.

“However, it doesn’t address debts that have already originated. It does give the lenders a chance to write off the debts across the board. But, unfortunately, nothing like that has happened.”

Daniel Hůle | Photo: Luboš Vedral,  Czech Radio

According to the data of the Czech Chamber of Executors, there are currently 2,252 children and adolescents under the age of 18 who are facing a distraint order over unpaid debts, compared to 3,500 two years ago.

Nearly 700 of the total are schoolchildren aged six to 11, while another 700 fall into the age group of 12 to 14. Around two-thirds of the children are being charged less than 2,000 crowns, but more than 173 have a debt amounting to 20,000 crowns.

Psychologist Lenka Kollárová, who studies the impact of debts on minors, says that the stress from owing money at such a young age can have a serious impact on their mental health:

“The negative impact of financial stress on mental health of children, adolescents and young adults, especially symptoms of depression and anxiety coinciding with increased family conflicts is a relatively well-known phenomenon in psychology. This is due to a loss of sense of control and a persistent sense of threat.”

Mrs Kollárová also points out that the indebtedness of minors can lead to a widening of the gap between wealthy, educated families and those from a socially disadvantaged background.

As a result of long-term indebtedness, young adults may fall also into the trap of working poverty, she says:

“Working poverty is a challenging, difficult and unpleasant condition, and it can ultimately undermine long-term attitudes to work, because these people feel that it is not worth it to work.”

Authors: Ruth Fraňková , Martina Rasch
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