Postponement of payment, debt payment by instalments, sale, write off and partial write off of claims

Natural persons and legal entities may ask for a postponement of payment, debt payment by instalments, arrange factoring, a write-off or a partial write-off of claims deriving from debts that represent the budget revenues of the City of Rijeka.

Requests relate to the following revenues:

  • lease of business premises and pubic urban areas under a lease agreement,
  • flat rentals;
  • concession fee;
  • fee for concession approval, save for concessions for the economic exploitation of the maritime domain;
  • fines imposed by the City;
  • claims deriving from the sale of fixed assets and chattels owned by the City of Rijeka;
  • other claims of the City of Rijeka;
  • claims deriving from income generated from its own activities;
  • income based on specific agreements and other city revenues;
  • claims established by final court judgments etc.

Requests may not be submitted in respect of debts and claims deriving from:

  • public contributions (utility contribution fee, monument annuity and tax revenues of the City of Rijeka), save for those deriving from concession fees;
  • mutual claims between state and local and regional self-government units;
  • mutual claims of local and regional self-government units;
  • claims acquired without any grounds;
  • housing and other loans that are not approved by state or local and regional self-government units or which are not backed by state or local and regional self-government units;
  • agreements for the sale of socially owned flats with specially protected tenancies;
  • agreements for the sale of flats pursuant to the regulations that lay down subsidised residential construction and other regulations;
  • concessions for the economic exploitation of the maritime domain;
  • claims in respect of which the postponement of payment, payment by instalments and factoring, write off or partial write off have been laid down by special regulations.

 

A family and another community of individuals living together who settle the costs of living, irrespective of kinship relations, is considered a household.

The postponement of payment, debt payment by instalments, factoring and write-off of claims may be approved in favour of the debtor once in a five-year period.

The procedure for the realisation of a postponed payment, payment by instalments, factoring and a write-off or a partial write-off of claims is carried out in accordance with and under conditions laid down by the Regulation on the criteria, standards and procedure for postponing payment, payment by instalments, and factoring, writing off and partially writing off claims (“Official Gazette“ No 52/1394/14).

Postponement of payment and debt payment by instalments

A request may be submitted by legal entities, natural persons – citizens, natural persons craftsmen and natural persons who carry out an independent activity by filling out the forms laid down by the Regulation: form ZFO (for natural persons) and form ZPO (for legal entities).

Natural persons must meet “the social condition“ if on the basis of a decision issued by the competent authority they have the right to a guaranteed minimum refund, namely the right to maintenance aid under the social welfare system or “the property condition“ if the cumulative property situation of the applicant and of his/her household members who have attained the age of majority correspond to the following conditions: that monetary assets amount up to 6 budgetary bases as of the day of submitting the request for every household member (cash in national and foreign currencies, securities, capital shares and other assets abroad) and that income and receipts amount up to one budgetary basis for every member of the household as of the day of submitting the request.

Legal entities and natural persons craftsmen and natural persons carrying out an independent activity must meet the following conditions: the records kept by the Tax administration must not show any due debt (based on tax liabilities and contributions for pension and health insurance), no dividend was paid out, no share in profits or a dividend advance payment made in the previous or current years with the simultaneous existence of tax debt, a one-off payment of debt would be an inappropriate burden for the legal entity or would cause a major economic damage, while business and financial plans have been assessed as sustainable in the market and the prescribed documentation has been delivered.

The applicant shall fill out the application form under material and criminal liability, and shall submit it to the administrative department competent for a single type of budgetary income / claim.

Write-off and partial write-off of claims of natural persons, citizens

Requests may be submitted by natural persons citizens filling out form ZFO as laid down by the Regulation.

Natural persons must meet the “social condition“ if on the basis of a decision issued by the competent authority they have the right to a guaranteed minimum refund, namely the right to maintenance aid under the social welfare system or “the property condition“ if the cumulative property situation of the applicant and of his/her household members who have attained the age of majority correspond to the following conditions: that monetary assets amount up to 2 budgetary bases as of the day of submitting the request for every household member (cash in national and foreign currencies, securities, capital shares and other assets abroad), that s/he possesses a flat or a house that s/he uses exclusively for housing, and that s/he possesses a car or a vessel worth 2 budgetary bases as of the day of submitting the request for every member of the household and that income and receipts amount up to one budgetary basis as of the day of submitting the request for every member of the household.

The applicant shall fill out the application form under material and criminal liability, and shall submit it to the administrative department competent for a single type of budgetary income / claim.

It has been stipulated that in the event that a write-off of debt is approved in favour of the natural person, citizen, irrespective of the reason for which the debt has been generated, the next request for the write-off of debts may not be submitted before the expiry of a five-year period from the adoption of the decision on the write-off of claims relating to previous debt.

Write-off of debt relating to interest if the principal amount is paid entirely in one-off payment

A request may be submitted by legal entities and natural persons craftsmen and natural persons who carry out an independent activity and natural persons – citizens, without a deadline for submission.

It has been laid down that debt deriving from interest may be written off if the due and undue principal amount of debt is paid entirely in one off payment within 30 days after the date of harmonising the balance. The applicant whose request relates to interest may not submit simultaneously a request for postponement or for debt payment by instalments.

Other write-offs

As regards claims toward the debtor, legal entity that cannot be collected through insolvency proceedings on the basis of a legally valid decision on the termination of insolvency proceedings or liquidation proceedings and on the basis of a legally valid decision on the cancellation of the legal entity from the court registry, debt is written off from business records by the competent analytical accounting offices and the municipal Finance Department.

The competent analytical accounting offices of their own motion may write off the debt of the same debtor amounting up to HRK 50.00.

The competent analytical accounting offices of their own motion shall write off claims towards the debtor both natural persons and legal entities if the statute of limitations has come into effect in regard to claim collection, in accordance with legal regulations.

It has been prescribed that claims that according to the value of dispute belong to small value disputes, namely amounting up to HRK 10,000.00, will be written off and the collection procedure shall be instituted abroad, as well as claims towards natural persons that exceed the amount of HRK 10,000.00, i.e. amounting up to HRK 50,000.00 towards legal entities on the basis of a reasoned proposal of the State’s Attorney Office of the Republic of Croatia when it is not meaningful to institute a procedure before foreign courts, given the amount of costs for taking legal action before foreign courts.

It has been prescribed that on the proposal of the competent State’s Attorney Office payment by instalments of the claims generated based on litigation costs are to be approved if the request relates to a postponement of payment, debt payment by instalments, a write-off of claims submitted before instituting enforcement proceedings and an agreement will be concluded to regulate mutual relationships.

Factoring

Solely claims towards the debtor, legal entity can be sold. Claims are sold in public auctions, by an invitation to tender or by making direct deals, with the consent of the Government of the Republic of Croatia.

The prescribed criteria and conditions of factoring are as follows: the value of assets must be lower than the value of claims, namely the value of assets with registered security interest is lower than the value of claims, the debtor runs the risk that he may not collect the debt (illiquidity, insolvency, over-borrowing), the sale is effected in accordance with the provisions of the bankruptcy procedure, the claim of a debtor majority owned by the state or by local and regional self government units cannot be sold, in the first auction or tender the initial price amounts to 75% of the nominal debt amount (principal amount with interest), that the second auction or tender is fixed after the expiry of a 30-day period after the first auction and the initial price cannot be below 50% of the nominal debt amount (principal amount and interest) under condition that the property of the legal entity is below 50% of the claim and the third auction or tender is fixed after the expiry of a 30-day period following the second auction and the initial price cannot be below 35% of the nominal amount of debt (principal amount with interest) under condition that the property of the legal entity is below 35% of the claim.

Submitting requests

Requests are submitted on the prescribed forms ZPO (legal entities) and ZFO (natural persons, natural persons craftsmen and natural persons who carry out an independent activity).

Requests for a write-off of debt deriving form interest if the due and undue amount of principal is paid entirely in one-off payment in accordance with Article 28 of the Regulation must be in writing and reasoned, and they may be submitted also by filling out the forms of the City of Rijeka ZPO-KTE (legal entities) and ZFO-KTE (natural persons, natural persons craftsmen and natural persons that carry out an independent activity).

Requests are handed over to the Finance Department of the City of Rijeka, at the address: Rijeka, Korzo 16, or by mail or directly at the clerk’s office of the City of Rijeka, Rijeka, Titov trg 3.

The procedure for the realisation of postponed payment, debt payment by instalments, factoring, a write-off or a partial write-off in respect of rental is carried out through the city Department for property management, Directorate of residential facilities management, Ri stan Rijeka, and the Finance Department.

The decision is passed by the Finance Department or the mayor in accordance with the Regulation.

Invitation for the submission of requests fro a write-off of debt

An invitation to submit requests for a write-off of debt deriving form interest in the event that the due and undue amount of principal is paid in one off payment entirely pursuant to the Regulation on the criteria, standards and procedure fro postponing payment, debt payment by instalments, and factoring, a write-off or a partial write-off of claims.