Debt Relief & Personal Insolvency in Czechia (2026): How It Works
In Czechia, individuals who cannot pay their debts may apply for oddluzeni (debt relief, sometimes called osobni bankrot - personal bankruptcy), a procedure under zákon c. 182/2006 Sb. (the Insolvency Act, known as the Insolvencni zakon). The application must be prepared and filed by an authorized professional under § 390a of the Act. An insolvenční spravce (insolvency administrator) is appointed by the court to supervise the procedure. The standard outcome is a court-supervised repayment plan (splatkovy kalendar se zpenezenim majetkove podstaty); after 3 years of meeting all obligations the oddluzeni is fulfilled (§ 412a) and remaining debts are discharged by court order (osvobozeni, § 414). The official insolvency register is the Insolvencni rejstrik at eisir.justice.cz, maintained by the Ministry of Justice (msp.gov.cz). The procedure was significantly reformed by zákon c. 31/2019 Sb., effective 1 June 2019.
What it is called
The formal name of the procedure is oddluzeni (debt relief). Colloquially it is referred to as osobni bankrot (personal bankruptcy). Both terms refer to the same procedure, which is governed by Hlava V of the Czech Insolvency Act, zákon c. 182/2006 Sb. o upadku a zpusobech jeho reseni (the Insolvencni zakon). The law is officially published at the Czech Official Journal collection, accessible at e-sbirka.gov.cz (the official e-Sbirka database, the authoritative source for Czech law since 1 January 2024), and at the Czech Parliament legislative database at psp.cz. A major amendment, zákon c. 31/2019 Sb., came into force on 1 June 2019 and broadened access to oddluzeni significantly, most notably by removing the previous requirement that debtors be able to repay a minimum percentage of their debts.
Who can use it
Under § 389 of the Insolvency Act, natural persons (individuals) are the primary group entitled to apply for oddluzeni. Since the 2019 amendment (zákon c. 31/2019 Sb.), the previous minimum repayment threshold (formerly 30% of eligible debts) was abolished: a debtor's income level alone is no longer a bar to accessing the procedure. The debtor must not have acted with dishonest intent in relation to their creditors. Under § 395, the court will refuse to permit oddluzeni if it concludes from the available information that the debtor's proposal is filed with dishonest intent (nepoctivý záměr) or is designed to harm particular creditors. The debtor must also not be a legal entity (companies use different insolvency tracks). Crucially, the application must be prepared and filed by one of the following authorized persons under § 390a of the Insolvency Act: a licensed lawyer (advokat), a notary (notar), a licensed insolvency administrator (insolvenční spravce), or a court executor (soudni exekutor). Self-prepared proposals are not accepted. The maximum fee payable to the authorized professional is CZK 4,000 excluding VAT for a single debtor, or CZK 6,000 excluding VAT for a married couple filing jointly (§ 390a; fee confirmed at vesta.justice.cz).
How the process works
The oddluzeni procedure has the following main stages. Stage 1 - Engaging an authorized professional: The debtor contacts one of the authorized professionals listed under § 390a (lawyer, notary, insolvency administrator, or court executor). A voluntary registry of professionals willing to assist is maintained by the Ministry of Justice at vesta.justice.cz. The professional prepares the navrh na povoleni oddluzeni (proposal to permit debt relief) together with an inventory of assets, list of debts, and evidence of income. Stage 2 - Filing and court permission: The proposal is filed with the competent regional court (krajský soud) in the debtor's area. The court examines whether the formal conditions are met and whether there is dishonest intent (§ 395). If the court is satisfied, it issues a decision permitting oddluzeni (povoleni oddluzeni) and appoints an insolvenční spravce (insolvency administrator). Creditors are notified and invited to register their claims within a set deadline. Stage 3 - Creditors' meeting and method of discharge: The court, in consultation with the administrator and creditors, decides on the method of satisfying creditors. The two main methods under § 398 of the Insolvency Act are: the splatkovy kalendar (repayment plan), under which the debtor makes monthly payments to the administrator over the plan period; and zpeněženi majetkove podstaty (asset liquidation), under which the debtor's non-exempt assets are sold and proceeds distributed. The repayment plan is more common for debtors who have income but limited assets. Stage 4 - Plan execution and supervision: The insolvency administrator monitors compliance, distributes funds to creditors, and reports to the court. The debtor must cooperate fully, disclose all income and assets, notify the administrator of any material changes, and must not take on new debt without the administrator's knowledge.
How long it lasts and the outcome
Under § 412a of the Insolvency Act, a debtor's oddluzeni via the repayment plan (splatkovy kalendar se zpenezenim majetkove podstaty) is fulfilled after 3 years from approval, provided the debtor met all material obligations during that time and the oddluzeni was not cancelled. (It is also fulfilled at any point if unsecured creditors are repaid in full.) This uniform 3-year period replaced the earlier 5-year rule, implementing EU Directive 2019/1023 on preventive restructuring and discharge; it applies to all debtors. (Verified from the current consolidated text of zákon c. 182/2006 Sb., § 412a.) After the debtor has fulfilled the obligations under the approved plan (or after a court-ordered asset liquidation is complete), the court issues a decision under § 414 of the Insolvency Act granting osvobozeni od placeni zbytku pohledavek (exemption from paying remaining debt balances). This decision releases the debtor from all remaining unpaid liabilities toward insolvency creditors that were included in the proceedings. Debts NOT covered by discharge (§ 416): maintenance obligations (alimenty); debts arising from criminal fines or administrative penalties; debts from intentionally caused harm; and certain other obligations expressly excluded by law. Debts that a creditor failed to register in time through their own fault are also excluded from the discharge's effect. The entire proceeding and the discharge decision are recorded in the publicly accessible Insolvencni rejstrik at eisir.justice.cz. Entries remain publicly visible for a period after the close of proceedings.
Where to get official help
- Ministry of Justice of the Czech Republic (Ministerstvo spravedlnosti): msp.gov.cz - the official ministry responsible for insolvency law and the insolvency register. - Czech Insolvency Register (Insolvencni rejstrik): eisir.justice.cz - the official public register of all Czech insolvency proceedings; all case documents are available here. - Official e-Sbirka (Czech official law database): e-sbirka.gov.cz - authoritative source for zákon c. 182/2006 Sb. and all amendments; use this to verify current provisions. - Voluntary registry of authorized proposal preparers: vesta.justice.cz - Ministry of Justice list of lawyers, notaries, insolvency administrators and court executors who are registered as willing to prepare oddluzeni proposals. The maximum regulated fee is CZK 4,000 (single) or CZK 6,000 (joint) excluding VAT. - Non-profit debt counselling organizations in Czechia include Clovekvtisni (fos.cz) and regional poradny (citizen advice bureaux); many Municipalities and charitable organizations operate free debt counselling services. IMPORTANT: This guide is for general information only and does not constitute legal advice. The Insolvency Act has been amended multiple times; always verify current rules at e-sbirka.gov.cz and consult a licensed professional (lawyer, notary, insolvency administrator or court executor) before taking any action.
FAQ
Can I file for oddluzeni myself, without a lawyer?
No. Under § 390a of zákon c. 182/2006 Sb., the proposal for oddluzeni must be prepared and submitted by one of four types of authorized professional: a licensed lawyer (advokat), a notary (notar), a licensed insolvency administrator (insolvenční spravce), or a court executor (soudni exekutor). A proposal submitted directly by the debtor without an authorized professional will not be accepted by the court. The maximum fee for this service is regulated: CZK 4,000 excluding VAT for a single debtor, CZK 6,000 excluding VAT for a married couple. The voluntary Ministry of Justice registry at vesta.justice.cz lists professionals willing to assist. (Source: § 390a Insolvencniho zakona, confirmed at vesta.justice.cz)
What is the difference between oddluzeni and normal insolvency (konkurs)?
Konkurs (bankruptcy/liquidation) is a procedure in which all the debtor's non-exempt assets are sold and the proceeds distributed to creditors. If there is a shortfall, creditors remain legally unpaid. Oddluzeni (debt relief) is specifically designed for individuals: it gives the debtor the opportunity to repay what they can afford over a supervised period (3 years, § 412a) and then receive a court discharge from the remainder. Unlike konkurs, oddluzeni ends in legal release from remaining debts, giving the debtor a genuine fresh start. The court decides which procedure is appropriate; the debtor may request oddluzeni in the proposal. (Source: zákon c. 182/2006 Sb., §§ 244-316 on konkurs; §§ 389-418 on oddluzeni)
What happens if I cannot keep up with my repayment plan during oddluzeni?
If the debtor materially fails to meet the obligations under the approved repayment plan - for example, stops making the required monthly payments without an acceptable reason, hides assets or income, or incurs significant new debt - the court may cancel the approved plan and convert the proceedings to konkurs (standard bankruptcy/liquidation). This would mean the debtor's remaining non-exempt assets are liquidated and no discharge is granted. It is therefore essential to notify the insolvency administrator immediately of any material change in income or circumstances. Creditors or the administrator may also petition the court to revoke permission for oddluzeni on grounds of dishonest conduct. (Source: § 418 Insolvencniho zakona)
⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.