Manual COVID-19: The postponement of loans repayments

Due to the COVID-19 pandemic, debtors may have some difficulties repaying their monetary debts. Act No. 177/2020 Coll. On certain credit repayment measures with effect from 17 April 2020 reacts to that.

  • It relates to loans arranged and drew down before 26 March 2020 and loans arranged before 26 March 2020 (and drew down later) in connection with real estate (e.g. mortgages).
  • It does not apply, for example, to a loan for which the debtor was more than 30 days in delay on 26 March 2020, nor to an operating lease or credit line (e.g. overdraft or credit card).
Possibility to use the protection period
  • The protection period means the postponement of monetary payment. At the same time, the loan security and the period of the fixed interest rate are extended by this period.
  • Even during the protection period, the creditor is entitled to certain payments. These are the following:
  1. Debtor self-employed persons = interest rate stipulated in the contract.
  2. Debtor legal entity = interest rate stipulated in the contract and other interim payments.
  3. Debtor consumer = interest up to a maximum of 9% (repo rate + 8).
  • The protection period begins to run on the basis of the debtor‘s notification from the beginning of the month following the delivery of the notification. The end of the protection period is chosen by the debtor – until 31 October 2020 or shorter until 31 July 2020.
  • The notification shall be made by the debtor in writing or in another manner determined by the creditor; otherwise, the debtor must have a delivery receipt (e.g. by registered mail, data box).
  • The notification contains:
  1. Request to use the protection period due to the negative economic impact of the COVID-19 pandemic.
  2. Which loans should the protection period cover - otherwise all.
  3. Whether to choose a shorter duration of the protection period - otherwise until 31 October 2020.
  • Actions connected with the use of the protection period are free of charge by law.
  • If, since 12 March 2020, an agreement has been concluded between the creditor and the debtor to postpone the payment of debt due during or after the protection period due to the negative economic impact of the COVID-19 pandemic, and the debtor now announces that he is using the protection period, the agreement on the postponement of the debt shall cease to have effect on the first day of the protection period.
  • The effects of the agreement on the debt due before the start of the protection period remain.
  • Debtors - legal persons who notify the creditor of their intention to use the protection period may not, during this period, dispose of assets that could serve to satisfy the creditor.
Payments related to the default of the debtor - natural persons
  • In the period from 1 May 2020 to 31 October 2020, the prohibition on charging sanctions agreed in the loan agreement or arising from the law (e.g. interest on arrears) shall apply, including those debtors who have already got into the delay, as well as those who have not applied for a protection period.

Autoři: Veronika Odrobinová a David Fabián