Improvement in Debt Repayment Despite Rising Living Costs

The Czechs’ ability to repay debts has slightly improved this year. As of the end of September, 4.53 percent of adults had overdue debts, a decrease from 4.94 percent a year earlier and 5.15 percent at the end of 2021. This positive trend occurs even as high inflation increases living costs for many people.

The region with the most significant proportion of adults with overdue debts is Ústecký Kraj, where 9.32 percent of adults are in debt. Karlovarský follows this with 7.94 percent. At the other end of the spectrum, Zlínský Kraj and Vysočina have the lowest percentages, with 2.79 and 2.80 percent, respectively.

The total number of people with overdue debts decreased by two thousand to 406 thousand during the third quarter of this year. The amount owed remained steady at 30.7 billion crowns.

The secretary of the Solus association, Jan Stopka, noted that 15 years ago, the register contained over a million citizens with overdue debts. The number of these individuals has been decreasing with the development of responsible lending. This is due to debt collection being discontinued on the creditor’s side or debt repayment on the client’s side.

Despite the slight decrease in debtors, the number of new records in the register among consumers who had not previously struggled with their obligations is still increasing. This year, companies registered new overdue debts for 79,000 people. At that moment, 37,000 already had another delinquent debt, while the remaining 42,000 had no record in the register. These individuals only ran into debt repayment problems this year.

Over half of those registered this year regularly repaid their debts in the last twelve months. Stopka says these individuals do not notoriously fail to meet their obligations. This likely reflects the increase in living costs and the exhaustion of these consumers’ financial reserves.