The Czech Republic is a country whose economy has
undergone a transformation since 1989. Since joining the EU it has
been striving to reduce the differences in its economic standard and
the quality of its institutional environment in comparison with
developed countries. According to an assessment carried out by the
World Bank, the Czech Republic was long classed as a country
whose institutional development was seen as problematic. For many
years one of the things it was rated most poorly on was its bankruptcy
law. The new Insolvency Act, which is a modern law in terms of its
treatment of bankruptcy, was first adopted in the Czech Republic in
2006. This law, together with other regulatory measures, offers debtridden
Czech economic subjects legal instruments which are well
established and in common practice in developed market economies.
Since then, analyses performed by the World Bank and the London
EBRD have shown that there have been significant steps forward in
the quality of Czech bankruptcy law. The Czech Republic still lacks
an analytical apparatus which can offer a structured characterisation
of the general and specific conditions of Czech company and
household debt which is subject to current changes in the global
economy. This area has so far not been given the attention it
deserves. The lack of research is particularly clear as regards analysis
of household debt and householders- ability to settle their debts in a
reasonable manner using legal and other state means of regulation.
We assume that Czech households have recourse to a modern
insolvency law, yet the effective application of this law is hampered
by the inconsistencies in the formal and informal institutions
involved in resolving debt. This in turn is based on the assumption
that this lack of consistency is more marked in cases of personal
bankruptcy. Our aim is to identify the symptoms which indicate that
for some time the effective application of bankruptcy law in the
Czech Republic will be hindered by factors originating in
householders- relative inability to identify the risks of falling into
debt.
[1] R.Paap, H.H. van Dijk, "Distribution and mobillity of wealth of nation,"
European Economic Revue, vol, 42, pp. 1269-1293, 1998.
[2] T. A. Di Prete, A. McManus, "Family change, employment transition,
and welfare state: household income dynamics in the United States and
Germany," American Sociological Revue, vol.65, pp. 343-370, 2000.
[3] L. A. Lillard, R. J. Willis, "Dynamic aspect of earning mobility,"
Econometrica, vol. 46, pp. 985-1012, 1978.
[4] N. T. Longford, M. G. Pittau, "Stability of household income in
European countries in the 1990s," Computational Statistics & Data
Analysis, vol. 51, pp. 1364-1383, 2006.
[5] J. Bartošová, "AnalÛza a modelování finančního potenciálu českÛch
(slovenskÛch) domácností" ("Analysis and Modelling of the Financial
Potential of Czech (Slovak) Households") . Research Project GA─îR
No. 402/09/0515 Available on the Internet at:
http://mi.fm.vse.cz/gacr09/
[6] L. Kouba, L., "Převažuj├¡c├¡ proud" soci├íln─ø - ekonomick├¢ch př├¡stup┼» k
teorii r┼»stu: Form├íln├¡ pojet├¡ instituc├¡ a d┼»raz na ekonomické instituce.
("The Prevailing Current" socio - economic approaches to growth
theory: Formal concept of institutions and emphasis on economic
institutions"), N├írodohospod├ířsk├¢ obzor (National Economic Horizon),
vol. IX., no. 3, 2009b.
[7] L. Mlčoch, Institucionální ekonomie (Institutional Economy),Praha :
Univerzita Karlova, 2005.
[8] R. Holman, D─øjiny ekonomického my┼ílen├¡ (The History of Economic
Thought). Praha : C.H.Beck, 2005.
[9] Šíma (36)
[10] C. D. North, Institutions, institutional change and economic
performance. Cambridge : Bambridge University Press, 1990.
[11] J. L. Alston, New Institutional Econmics. In Durlauf, S., N., Blume, L.
The new Palgrave dictionary of economics. Houndmills: Palgrave
Macmillan, 2008.
[12] P.Vym─øtal, M. Ž├ík, "Instituce a v├¢konnost" ("Institutions and
Performance"), Politická ekonomie (Political Economy), no. 4, pp. 545-
566, 2005.
[13] L.Bortel, "Vazba mezi pr├ívem, ekonomi├¡ a hospod├ířstv├¡m" ("The Link
between Law, Economics and the Economy"). Politická ekonomie
(Political Economy), No. 5, pp. 661-670, 2005.
[14] C., D. North, Institutions, institutional change and economic
performance. Cambridge : Bambridge University Press, 1990.
[15] L.Kouba, "The Prevailing Current" socio - economic approaches to
growth theory: Formal concept of institutions and emphasis on economic
institutions. N├írodohospod├ířsk├¢ obzor (National Economic Horizon),
vol. IX., no. 3, p. 126.
[16] Z. Kudrna, "Tunnelers on the Retreat" (Tunel├íři na ├║stupu). Available
on the Internet at: http://dialog.ihned.cz/machacek/c1-51805450-jsoupripady-
slavie-a-sazky-pribehem-ocisty-na-ceste-k-vlade-prava-v-cesku
[17] World Bank. Doing Business. Closing a Business.
http://www.doingbusiness.org/reports/global-reports/doing-business-
2010. Available at:
http://www.doingbusiness.org/data/exploretopics/closing-a-business
[18] E.Klvačová, "Cultivation of the Institutional Framwework as a
Fundamental Benefit of the Czech Republic-s accession to the European
Union" ("Kultivace institucion├íln├¡ho r├ímce jako z├íkladn├¡ př├¡nos vstupu
─îeské republiky do Evropské unie"). Politick├í ekonomie (Political
Economy), vol. 51, no. 2, pp. 236-253, 2003.
[19] J. Havel, "Building Institutions in the Czech Republic" ("Budování
instituc├¡ v ─îeské republice"). Politick├í ekonomie (Political Economy).
vol. 52, no. 6, pp. 723-738, 2004.
[20] Transparency International. Index vnímání korupce (Corruption
Perception Index) - CPI [online]. Available on the Internet at:
http://www.transparency.cz/
[21] EBRD. Insolvency Law Assessment Project - 2009. Available on the
Internet at:
http://www.ebrd.com/downloads/legal/insolvency/czechre_ia.pdf
[22] World Bank: Doing Business 2011 data for the Czech Republic.
Available on the Internet at:
http://www.doingbusiness.org/data/exploreeconomies/czechrepublic#
closing-a-business
[23] M.Buriška, Law and economic activity - institutional analysis of the
Czech economy. Masaryk University, ESF, 2011, pp. 34.
[24] O.Knot, O. Vychodil, "What drives the optimal bankruptcy law design?"
Finance a ├║v─ør (Finance and Credit), vol. 55, no 3-4, pp. 110-123, 2005.
[25] World Bank. Doing Business in 2007: How to Reform [online].
Washington, DC: The World Bank and the International Finance
Corporation. [cit. 2011-8_9]. Available at:
http://www.doingbusiness.org/reports/doing-business/doing-business-
2006
[26] S. Djankov, S. Hart, O. McLiesh, C. Shleifer, A. Closing a Business
Methodology - Efficiency in Bankruptcy. Available at:
http://www.doingbusiness.org/methodology/closing-a-business
[27] World Bank. Doing Business in 2007: How to Reform [online].
Washington, DC: The World Bank and the International Finance
Corporation. [cit. 2011-8_9]. Available at:
http://www.doingbusiness.org/reports/doing-business/doing-business-
2006
[28] Creditreform. Database of Czech and European firms. Available on the
Internet at:
http://web.creditreform.cz/cs/content/online_service/index.jsp
[29] World Bank. Doing Business. Closing a Business. Available at:
http://www.doingbusiness.org/reports/global-reports/doing-business-
2010, http://www.doingbusiness.org/data/exploretopics/closing-abusiness
[30] World Bank: Doing Business 2011 data for the Czech Republic.
Available on the Internet at:
http://www.doingbusiness.org/data/exploreeconomies/czechrepublic#
closing-a-business
[31] Empirical Research Centre (STEM). (Středisko empirick├¢ch v├¢zkum┼»).
Survey of the Economic Behaviour of Czech Households (Průzkum
ekonomického chov├ín├¡ ─ìesk├¢ch dom├ícnost├¡). Available on the Internet
at: http://www.stem.cz/show/13
[32] Empirical Research Centre (STEM). (Středisko empirick├¢ch v├¢zkum┼»).
Survey of the Economic Behaviour of Czech Households (Průzkum
ekonomického chov├ín├¡ ─ìesk├¢ch dom├ícnost├¡). Available on the Internet
at: http://www.stem.cz/show/13
[33] L. Smr─ìka, "Family debts - current topic today," Economics and
Management. [online], 2008, vol. 1, no. 1, p. 11 pp. Available at:
http://www.ekonomikaamanagement.cz/cz/clanek-zadluzeni-rodinklicove-
tema-soucasnosti.html
[34] Database of the Chamber of Executor. Number of executions in the
Czech Republic. Available on the Internet at:
http://www.ekcr.cz/1/statistiky/87-statistiky?w
[35] Czech National Bank. Database ARAD. Available on the Internet at:
http://www.cnb.cz/docs/ARADY/HTML/index.htm
[36] Czech Statistical Office. Statistics of the dynamics of growth in the ratio
of final household consumption to GDP. Available at:
http://www.czso.cz/eng/redakce.nsf/i/home
[1] R.Paap, H.H. van Dijk, "Distribution and mobillity of wealth of nation,"
European Economic Revue, vol, 42, pp. 1269-1293, 1998.
[2] T. A. Di Prete, A. McManus, "Family change, employment transition,
and welfare state: household income dynamics in the United States and
Germany," American Sociological Revue, vol.65, pp. 343-370, 2000.
[3] L. A. Lillard, R. J. Willis, "Dynamic aspect of earning mobility,"
Econometrica, vol. 46, pp. 985-1012, 1978.
[4] N. T. Longford, M. G. Pittau, "Stability of household income in
European countries in the 1990s," Computational Statistics & Data
Analysis, vol. 51, pp. 1364-1383, 2006.
[5] J. Bartošová, "AnalÛza a modelování finančního potenciálu českÛch
(slovenskÛch) domácností" ("Analysis and Modelling of the Financial
Potential of Czech (Slovak) Households") . Research Project GA─îR
No. 402/09/0515 Available on the Internet at:
http://mi.fm.vse.cz/gacr09/
[6] L. Kouba, L., "Převažuj├¡c├¡ proud" soci├íln─ø - ekonomick├¢ch př├¡stup┼» k
teorii r┼»stu: Form├íln├¡ pojet├¡ instituc├¡ a d┼»raz na ekonomické instituce.
("The Prevailing Current" socio - economic approaches to growth
theory: Formal concept of institutions and emphasis on economic
institutions"), N├írodohospod├ířsk├¢ obzor (National Economic Horizon),
vol. IX., no. 3, 2009b.
[7] L. Mlčoch, Institucionální ekonomie (Institutional Economy),Praha :
Univerzita Karlova, 2005.
[8] R. Holman, D─øjiny ekonomického my┼ílen├¡ (The History of Economic
Thought). Praha : C.H.Beck, 2005.
[9] Šíma (36)
[10] C. D. North, Institutions, institutional change and economic
performance. Cambridge : Bambridge University Press, 1990.
[11] J. L. Alston, New Institutional Econmics. In Durlauf, S., N., Blume, L.
The new Palgrave dictionary of economics. Houndmills: Palgrave
Macmillan, 2008.
[12] P.Vym─øtal, M. Ž├ík, "Instituce a v├¢konnost" ("Institutions and
Performance"), Politická ekonomie (Political Economy), no. 4, pp. 545-
566, 2005.
[13] L.Bortel, "Vazba mezi pr├ívem, ekonomi├¡ a hospod├ířstv├¡m" ("The Link
between Law, Economics and the Economy"). Politická ekonomie
(Political Economy), No. 5, pp. 661-670, 2005.
[14] C., D. North, Institutions, institutional change and economic
performance. Cambridge : Bambridge University Press, 1990.
[15] L.Kouba, "The Prevailing Current" socio - economic approaches to
growth theory: Formal concept of institutions and emphasis on economic
institutions. N├írodohospod├ířsk├¢ obzor (National Economic Horizon),
vol. IX., no. 3, p. 126.
[16] Z. Kudrna, "Tunnelers on the Retreat" (Tunel├íři na ├║stupu). Available
on the Internet at: http://dialog.ihned.cz/machacek/c1-51805450-jsoupripady-
slavie-a-sazky-pribehem-ocisty-na-ceste-k-vlade-prava-v-cesku
[17] World Bank. Doing Business. Closing a Business.
http://www.doingbusiness.org/reports/global-reports/doing-business-
2010. Available at:
http://www.doingbusiness.org/data/exploretopics/closing-a-business
[18] E.Klvačová, "Cultivation of the Institutional Framwework as a
Fundamental Benefit of the Czech Republic-s accession to the European
Union" ("Kultivace institucion├íln├¡ho r├ímce jako z├íkladn├¡ př├¡nos vstupu
─îeské republiky do Evropské unie"). Politick├í ekonomie (Political
Economy), vol. 51, no. 2, pp. 236-253, 2003.
[19] J. Havel, "Building Institutions in the Czech Republic" ("Budování
instituc├¡ v ─îeské republice"). Politick├í ekonomie (Political Economy).
vol. 52, no. 6, pp. 723-738, 2004.
[20] Transparency International. Index vnímání korupce (Corruption
Perception Index) - CPI [online]. Available on the Internet at:
http://www.transparency.cz/
[21] EBRD. Insolvency Law Assessment Project - 2009. Available on the
Internet at:
http://www.ebrd.com/downloads/legal/insolvency/czechre_ia.pdf
[22] World Bank: Doing Business 2011 data for the Czech Republic.
Available on the Internet at:
http://www.doingbusiness.org/data/exploreeconomies/czechrepublic#
closing-a-business
[23] M.Buriška, Law and economic activity - institutional analysis of the
Czech economy. Masaryk University, ESF, 2011, pp. 34.
[24] O.Knot, O. Vychodil, "What drives the optimal bankruptcy law design?"
Finance a ├║v─ør (Finance and Credit), vol. 55, no 3-4, pp. 110-123, 2005.
[25] World Bank. Doing Business in 2007: How to Reform [online].
Washington, DC: The World Bank and the International Finance
Corporation. [cit. 2011-8_9]. Available at:
http://www.doingbusiness.org/reports/doing-business/doing-business-
2006
[26] S. Djankov, S. Hart, O. McLiesh, C. Shleifer, A. Closing a Business
Methodology - Efficiency in Bankruptcy. Available at:
http://www.doingbusiness.org/methodology/closing-a-business
[27] World Bank. Doing Business in 2007: How to Reform [online].
Washington, DC: The World Bank and the International Finance
Corporation. [cit. 2011-8_9]. Available at:
http://www.doingbusiness.org/reports/doing-business/doing-business-
2006
[28] Creditreform. Database of Czech and European firms. Available on the
Internet at:
http://web.creditreform.cz/cs/content/online_service/index.jsp
[29] World Bank. Doing Business. Closing a Business. Available at:
http://www.doingbusiness.org/reports/global-reports/doing-business-
2010, http://www.doingbusiness.org/data/exploretopics/closing-abusiness
[30] World Bank: Doing Business 2011 data for the Czech Republic.
Available on the Internet at:
http://www.doingbusiness.org/data/exploreeconomies/czechrepublic#
closing-a-business
[31] Empirical Research Centre (STEM). (Středisko empirick├¢ch v├¢zkum┼»).
Survey of the Economic Behaviour of Czech Households (Průzkum
ekonomického chov├ín├¡ ─ìesk├¢ch dom├ícnost├¡). Available on the Internet
at: http://www.stem.cz/show/13
[32] Empirical Research Centre (STEM). (Středisko empirick├¢ch v├¢zkum┼»).
Survey of the Economic Behaviour of Czech Households (Průzkum
ekonomického chov├ín├¡ ─ìesk├¢ch dom├ícnost├¡). Available on the Internet
at: http://www.stem.cz/show/13
[33] L. Smr─ìka, "Family debts - current topic today," Economics and
Management. [online], 2008, vol. 1, no. 1, p. 11 pp. Available at:
http://www.ekonomikaamanagement.cz/cz/clanek-zadluzeni-rodinklicove-
tema-soucasnosti.html
[34] Database of the Chamber of Executor. Number of executions in the
Czech Republic. Available on the Internet at:
http://www.ekcr.cz/1/statistiky/87-statistiky?w
[35] Czech National Bank. Database ARAD. Available on the Internet at:
http://www.cnb.cz/docs/ARADY/HTML/index.htm
[36] Czech Statistical Office. Statistics of the dynamics of growth in the ratio
of final household consumption to GDP. Available at:
http://www.czso.cz/eng/redakce.nsf/i/home
@article{"International Journal of Business, Human and Social Sciences:63835", author = "Jindřiška Šedová", title = "Consumer Insolvency in the Czech Republic", abstract = "The Czech Republic is a country whose economy has
undergone a transformation since 1989. Since joining the EU it has
been striving to reduce the differences in its economic standard and
the quality of its institutional environment in comparison with
developed countries. According to an assessment carried out by the
World Bank, the Czech Republic was long classed as a country
whose institutional development was seen as problematic. For many
years one of the things it was rated most poorly on was its bankruptcy
law. The new Insolvency Act, which is a modern law in terms of its
treatment of bankruptcy, was first adopted in the Czech Republic in
2006. This law, together with other regulatory measures, offers debtridden
Czech economic subjects legal instruments which are well
established and in common practice in developed market economies.
Since then, analyses performed by the World Bank and the London
EBRD have shown that there have been significant steps forward in
the quality of Czech bankruptcy law. The Czech Republic still lacks
an analytical apparatus which can offer a structured characterisation
of the general and specific conditions of Czech company and
household debt which is subject to current changes in the global
economy. This area has so far not been given the attention it
deserves. The lack of research is particularly clear as regards analysis
of household debt and householders- ability to settle their debts in a
reasonable manner using legal and other state means of regulation.
We assume that Czech households have recourse to a modern
insolvency law, yet the effective application of this law is hampered
by the inconsistencies in the formal and informal institutions
involved in resolving debt. This in turn is based on the assumption
that this lack of consistency is more marked in cases of personal
bankruptcy. Our aim is to identify the symptoms which indicate that
for some time the effective application of bankruptcy law in the
Czech Republic will be hindered by factors originating in
householders- relative inability to identify the risks of falling into
debt.", keywords = "bankruptcy law, household debt, consumer
bankruptcy, business bankruptcy", volume = "5", number = "12", pages = "1995-6", }
