Newly Introduced Amendments to the Croatian Enforcement Act

On 3 August 2017, the Act on Amendments and Supplements to the Enforcement Act (Official Gazette 73/2017) entered into force. These are the first significant amendments to the Enforcement Act after those which came into force in 2014. These new amendments have introduced some significant changes, mostly relevant for the protection of debtors.

The most important amendments relate to enforcement over the real estate. For instance, principal of claim must exceed the amount of HRK 20,000 for this type of enforcement proceeding to be permitted. Moreover, the court may even reject the proposal for enforcement over the real estate even when the principal exceeds this amount, in case the judge conclude that such enforcement would undermine the fair balance between the rights of creditor and debtor.

Furthermore, a debtor who has to move out of the real estate in which he resides because the real estate is sold during the enforcement proceeding, and such real estate is necessary for the satisfaction of his (or persons he is legally obliged to support) basic housing needs, has the right to 18 months' housing allowance for accommodation costs.   In addition, the amount that cannot be executed from the salary or retirement pension is increased. Specifically, the amount exempted from enforcement has been increased by two-thirds to three quarters of the salary, but not more than two-thirds of the average net salary in Croatia.   It is also important to note that these amendments are also relevant for the application of the European Parliament and Council Regulation of 15 May 2014, establishing a procedure for European blocking account, in order to simplify and accelerate cross-border debt collection in civil and commercial matters.