The Czech Republic has witnessed a troubling rise in personal insolvencies during the first three quarters of this year. With over 10,000 cases reported—an 8% increase from the previous year. Analysts warn that a recent change in the law could further boost the number of insolvency applications by creating more favorable conditions for many debtors.
In total, 10,510 personal insolvencies were reported in the Czech Republic during the first three quarters of this year, marking an 8% increase compared to last year. Additionally, the number of insolvency applications rose to 11,085, reflecting a 10% increase. These figures are based on an analysis by CRIF – Czech Credit Bureau, which examined data from the www.informaceofirmach.cz portal.
According to Věra Kameníčková, an analyst at CRIF, the recent amendment to the Insolvency Act could lead to an even greater increase in insolvency applications. The reform, effective from 1 October, shortens the debt settlement period from five to three years, making it more appealing for many debtors. “It is likely that debtors who were previously hesitant will now file for insolvency,” explains Kameníčková. This trend is expected to lead to a further increase in insolvencies in the coming months.
In the last twelve months, 13,576 personal insolvencies were filed in the Czech Republic. The regions with the highest numbers of insolvencies are Moravian-Silesia (2,137 cases), Ústí nad Labem (1,859 cases), and Central Bohemia (1,455 cases). In contrast, Vysočina, Zlín, and Karlovy Vary reported the lowest numbers of personal insolvencies, with Prague and Karlovy Vary being the only regions to experience a decrease compared to the previous year.
The Ústí nad Labem region is particularly affected by personal insolvencies, with a rate of 23 cases per 10,000 inhabitants. The Moravian-Silesian Region follows closely with 18 cases per 10,000 inhabitants, while Prague has the lowest rate, with only seven cases per 10,000 inhabitants.
