Justice Minister, Drazen Bosnjakovic, commented on Thursday the announced government measures designed to help solve the problem of some 100,000 Croatians whose bank accounts have been frozen due to unpaid debts.

Bosnjakovic said that the fast-tracked bankruptcy proceedings that the government proposed would incentivise creditors, because if they agree to write off part of their debt claim their tax base would be reduced while still having access to tools to enforce payments.

The measure, to be included in the new consumer bankruptcy bill, should apply to all Croatians whose debts do not exceed 20,000 kuna and whose bank accounts have been blocked for more than three years, Bosnjakovic told reporters in front of the government building. According to the state’s financial agency Fina, this would apply to some 100,000 people.

Asked whether he feared that some debtors might abuse the measure, Bosnjakovic said that creditors would still have options to enforce payments. “If somebody hasn’t managed to get paid for their claims of up to 20,000 kuna in three years, then it’s very difficult to do. For three years the creditors had the opportunity to get paid – this measure would give them one more opportunity to settle the claim with debtors, so that the whole things ends,” Bosnjakovic said.

The government wants to speed up bankruptcy proceedings as the regular consumer bankruptcy procedure is very complicated, we haven’t had good experiences with it, and the number of cases solved by it was very small, Bosnjakovic added.

On Tuesday, Fina released data showing that in two and a half years since the introduction of the current consumer bankruptcy law in January 2016 only around 1,200 Croatians have filed for the procedure. Their total debt amounted to €118 million, with over two thirds of requests ending in failed out-of-court settlements.

In comparison, the number of Croatians with frozen bank accounts was around 324,700 in February, with their collective debt amounting to more than 43.1 billion kuna (€5.8 billion). In addition, some 24,000 businesses had their accounts frozen as well, owing a total of 13.6 billion (€1.8 billion).

(€1 = 7.37 kuna)

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