Factsheet for case HR-2020-16/1012 – Updated – measures in Croatia
|Country||Croatia , applies nationwide|
|Time period||Temporary, 17 April 2020 – 17 July 2020|
|Type||Legislations or other statutory regulations|
Measures to prevent social hardship
– Preventing over-indebtedness
|Author||Predrag Bejalovic (IJF) and Eurofound|
|Case created||20 July 2020 (updated 01 December 2020)|
Foreclosure proceedings in Croatia are initiated by creditor and securing proceedings are initiated by submitter of motion. In case the law stipulates that an institution or a person, who are not beneficiaries of a certain claim are authorized to initiate foreclosure or securing proceedings for such claim, such institution or a person act as creditors, i.e. submitters of motion in such proceedings.
Foreclosure orders are issued exclusively on basis of enforceable or credible documents. Enforceable documents are: enforceable court decision and enforceable judiciary settlement, enforceable settlement from Article 186.a of the Law on Civil Proceedings, enforceable decision of arbitration court, enforceable decision passed in administrative proceedings and enforceable settlement in administrative proceedings, in case they refer to payment of a monetary claim and unless law stipulates otherwise, enforceable notarial decision and enforceable notarial document, settlements entered into in proceedings in front of court of honour at chambers in the Republic of Croatia and settlements entered into in mediation proceedings, in accordance with provisions of the law stipulating mediation proceedings, and other documents stipulated by law as enforceable documents. Pursuant to the Law on Enforcement, credible documents are invoices, bills of exchange, cheque with protest and returned invoices, whenever it is necessary to constitute a claim, public documents, extracts from commercial records, legally notarized private documents that are considered to be public documents in accordance with special regulation. Calculation of accrued interest is considered to constitute invoice.
Foreclosure orders in the basis of enforceable documents are passed by courts and on the basis of credible documents by public notaries. Public notary is under obligation to issue and submit foreclosure order or to forward the file to the court within 30 days, at the latest, counting from the date of receipt of motion. Responsible institution for the foreclosure procedure is the Financial Agency (FINA). In case the debtor does not receive foreclosure, one more delivery shall be attempted within time limit that may not be shorter than 30 or longer than 60 days. In case of failed repeated delivery, document that had to be submitted shall be posted on court e-notice board. After that, in case debtor does not file a complaint, foreclosure order becomes valid and enforceable. Upon enforceability of foreclosure order, proceedings are continued in front of agency that implements foreclosure order in accordance with provisions of the Law on Enforcement and the law stipulating foreclosure of monetary assets. Further proceedings depend on whether the debtor has sufficient assets to pay the debt or not. Law on enforcement does not stipulate time limit in which foreclosure order must be issued. In practice, courts issue foreclosure orders within 2-3 months.
The government issued a decree on amendments to Zakon o provedbi ovrhe na novčanim sredstvima (The Act on the foreclosure on pecuniary assets) (OG 68/18, 2/20 and 46/20) and after the article 25, added two articles 25.a and 25.b) which define special circumstances when foreclosure can be postponed in special circumstances. Due to the Act, the Financial Agency (FINA) will not perform foreclosure procedure on pecuniary assets of natural persons. The Decree is valued for three months with the possibility on extension for next three months. During the mentioned period of postponed foreclosure, no income interest should be calculated and paid.
As many natural persons in Croatia face serious problems with foreclosure, such measure should be very welcomed in the circumstances of COVID19 and present financial difficulties. This is particularly important knowing that the Act allows for HRK 100 (€ 13) of initial debt to become HRK 1,000 (€130), with almost no limit.
|Does not apply to workers||Does not apply to businesses||Applies to all citizens|
No special funding required
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Role||No involvement||No involvement|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
Due to the nature of the measure social partners were not involved.
Social partners did not specify their views towards mentioned measure, but trade unions generally are very supportive of all activities directed to the improvement of the material and social position of people with debt problems.
Eurofound (2020), Foreclosure procedures on pecuniary assets of natural persons are temporarily halted, case HR-2020-16/1012 (measures in Croatia), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.