Could a thirteen-year-old girl who inherited millions in debt from her late father call your counseling center and live in a debt trap for the next few years?
Unfortunately, she doesn’t call when he inherits. Usually we come to such a case later, but unfortunately it always happens. When the parents of the child die, the guardians and those who decide for the child do not work very well in our country. And if they are not careful enough, and for example the deceased parents had a property, an apartment, but it turns out that the apartment also includes large debts, which someone can late claim, then the child really in debt. It’s a pretty unfortunate case, because there’s not much you can do if someone doesn’t reject the inheritance in time for the best interests of the child.
In principle, debts are not inherited under all circumstances, you can refuse them, but you also refuse the inheritance. As soon as a person accepts an inheritance, he accepts it with everything, with the pros and cons. Unfortunately, most of the time, the child does not decide alone, and on the other hand, he would not have to make a reasonable decision about it.
Could you explain to me how the power in place could do this and let the system operate in cold blood for twenty years, destroying the lives of hundreds of thousands of people? Let’s face it, some people are to blame…
The consequences were not fully realized until many years after the changes that led to it. At the same time, I think that in the beginning a lot of people who participated or agreed to it had no bad intentions, but we were touched by the experience of communism and normalization. There is a deep-rooted aversion to state regulation in our society. It was such absolutely limitless liberalism, even libertarianism. In the sense that everyone can do their own thing.
For example, if someone signs a contract with a bastard, it is the responsibility of the person who signed the contract, not of the bastard. It was the distortion that resulted from the allergy to communism that was reflected in it. Of course, some of the driving forces behind the whole process were people who probably planned how to make money. They had a business built into it.
I think the main person of this kind was Pavel Němec, who on the one hand took part in the creation of private executors, as they were created. And then, when he found himself Minister of Justice, he drastically increased the cost of legal representation for the smallest debts. The collection of ten, one hundred crown debts has become a huge business and these debts have been sold, for example, at 150% of their nominal value, which is absolutely unique.
Do you distinguish between cases of irresponsible and innocent debtors, and do you help especially those who did not themselves cause the debts?
We differ, but we help everyone. We certainly distinguish whether the debt was contracted legally or illegally. If it was created by law, we will make great efforts with the lawyers to defend the rights of this person.
Realize that we still have hundreds of thousands of illegal executions, executions of children. The spectrum is very broad and I think we are doing relatively well in the Constitutional Court, where we have won a number of cases. On the other hand, we know that there are people who caused the situation themselves. We try to help first and foremost. We are not the advocates of the poor, we try to eliminate the reasons why he ended up in this situation and not do it again.
What we consider important is that our support does not create injustice against anyone else. Very often debts arise when a person wants to buy a property and persuades someone to guarantee their property or income. When such a person comes and wants to serve, the debt rests with the guarantor, which is not right.
For example, we have the condition that if a person wants us to help them with debt relief, they must involve guarantors in the process and we solve it together. If a person wants someone to fight for their betterment indefinitely, they must hire a lawyer and pay them, they will not accompany us.
Aren’t you tired of having to explain everything again and again for so many years? When you see that maybe it’s hopeless somewhere?
Tired, probably not, when you explain it over and over again, it’s a more important routine for you. We become a jukebox that corresponds to a question, narrows the subject, and I give it an answer. Frustrating is something else. For example, I’m a vegetarian and all my life people explain to me that I don’t save animals and I have different jokes, I’m a little fed up. And likewise, I am fed up with the somewhat dogmatic approach that the debtor is to blame and why we should help him.
But especially the one who argues with me like that is not the actor of the story, and you have to realize that the execution does not only concern the creditor, the debtor and the executor. It revolves around us, this poverty, the gray area, then in the end we pay the taxpayers and it costs us all.
Debtors are not primarily financially illiterate, they are assumed not to understand. Some companies that try a very risky model are financially illiterate. And then they go to the deputies and shout that the debtor has impoverished them.
Daniel Hůle, Debt and Career Guidance Manager at People in Need
So if anyone here has an irresponsible business model that creates a lot of people in foreclosures, then we all make up the consequences of that irresponsible business. And I don’t want to pay it. I don’t know if those who so vehemently defend the commercial interest of the creditor want to pay.
But in most cases, there is a share of creditors who misjudged the risk, and they have to bear the consequences of their misjudgment of the risk. One could say that debtors are not primarily financial illiterates, they are presumed not to understand. Some companies that try a very risky model are financially illiterate. And then they go to the deputies and shout that the debtor has impoverished them. I think that’s nonsense, and I’m not tired of explaining it all the time.
How was Merciful Summer? Why don’t they see creating a protected account as a good solution at People in Need? And how many people are running? Listen to Lucie Výborná’s full interview with debt relief expert Daniel Hůl.