Proof of no Debt - Bezdluznost, Represetation at Debt Collectors

What is a Proof of Debt?

Proofs of no Debt are not an uncommon requirement in Czech Republic, and are required by the foreign police and financial institutions. The Proof of Debt - Bezdluznost is paper statement issued by a government body that the subject does not owe there any money. Since none of the government systems are connected or accessible from one central register, it is necessary to file an application for each individual organisation, which makes it quite time consuming. Also, the authorities have up to 30 days to respond, so it is essential to start well ahead in time!

Some common organisations the issue Proofs of no Debt:
  • Tax Office
  • Social Office
  • Public Health Care
  • Customs
  • Insolvencni Rejstrik
  • Insurance Companies

Some typical cases in which you will need proofs of no debt (bezdluznost)
  • applying for a business visa extension for trade license holders and directors of sros),
  • applying for a mortgage or bank loan
  • CNB / ERU applications
  • Attracting an investor / external capital
  • when closing a business (recommended)
  • when de-registering and leaving the country (recommended)

Alexio charges 2000 CZK per proof of no debt. In case of 2 or 3 proofs of debt, from the tax office, social office and health insurance, the costs are 3500 CZK for 2, 5000 CZK for 3 proofs.

Representation at Debt Collectors (Exekucni Urad / Soudní exekutor / Vymahác)

Not paying debts or invoices of suppliers can quickly escalate in Czech Republic. After a few reminders, a government body / company can decide to have the debt collected by an external debt collector.

The external debt collector will need in case of a company invoice permission of the Court to collect the debt. This also means that if you do not pay the invoice in time and the case does go to Court, you will have to pay the Court, the debt collector and the interests. A small 400 CZK debt can grow in a year or two to an incredible 20.000 CZK (!). This is to be taken seriously - we have seen Court cases over small mobile phone bills, or even a fine for not having a valid ticket in the metro.

Therefore, it is clever to start solving the problem before it gets filed at Court. Our experience is that when you show a cooperative attitude, usually some payment schedule can be negotiated.

When you know you have a debt, we will first contact the party involved and determine in what kind of state this debt is. If it has not gone to Court, our work can be limited to a few hours before an agreeable solution is reached, but if it is already in or after Court it may be much more difficult to find a solution.
We charge a deposit of 2500 CZK (which is enough to inform you about the current status) and 750 CZK / hour for any work after that.

Representation at Tax / Social / Health Authorities when in Debt

Provided that we react in time, a debt at the tax office, social office or health insurance will not be taken to Court, and additional costs are limited to interests (0.05% / day) and a penalty.

Tax / social / health charges are based on the income of previous year (in case of a trade license).
If the income of the current year is significantly less than last year, it is possible to negotiate lower monthly fees - do not let the amounts grow without paying them (!)

Therefore, if you experience a financial weaker episode in your business, contact us and we'll explain the situation at the authorities - this is always much better than doing nothing and ignoring reminders.
Ignoring reminders just will provoke irreversable legal actions, which are always much more expensive and difficult to solve.

We charge a deposit of 2500 CZK (which is enough to inform you about the current status) and 750 CZK / hour for any work after that.