Increase in the non-disposal amount from 01.01.2023
After a series of extraordinary increases in 2022, the amount that cannot be deducted from the debtor's income during insolvency proceedings has been increased again, starting on January 1st, 2023.
The basic non-disposal amount for the debtor is determined as 2/3 of the sum of the minimum subsistence level for an individual, which has been increased from the current amount of CZK 4,620 to CZK 4,860, and the normative cost of living for an individual, which has been increased from the current amount of CZK 10,185 to CZK 15,597.
As of 01.01.2023, the basic non-disposal amount is therefore CZK 13,638.00 (for comparison purposes only, this amount was CZK 7,872.75 as of 01.01.2021). For each dependent, the amount of the non-disposal amount is set at 1/3 of the basic non-disposal amount, i.e. CZK 3,409.50.
This increase will affect both, creditors, as their claims will be satisfied to a lesser extent from the deductions made from the debtors' income, and the debtors themselves. This can make it more difficult for some debtors to access debt relief, as they will have to earn higher incomes to qualify for debt relief. These effects could be partially mitigated by the forthcoming amendment to the Insolvency Act, which aims in particular to reduce the duration of debt relief from 60 months to 36 months for all debtors.