Insolvency proceedings are governed by Act No. 182/2006 Coll. on Bankruptcy and Methods its solution (Insolvency Act). Since on the basis of the § 71 of this Act, court decisions, summonses, notices and other documents are served by publication in the insolvency register (this is called service by publication), it is recommended that your employees regularly check the insolvency register. In this method of service, according to § 71(2) of the Act 182/2006 Coll. the document is deemed to have been served at the moment of publication in the Insolvency Register. It follows from the above that it is advisable to carry out this check on all employees on a regular basis, but especially if the employee is a new employee or an employee who is already subject to enforcement deductions. However, the employer is not legally obliged to carry out a check on the insolvency register.
Insolvency proceedings may be according to § 97 (1) of Act No. 182/2006 Coll.. commenced only on application on the date on which the matter comes before the competent court. According to § 101 paragraph 1 of the Insolvency Act the court shall publish the commencement of insolvency proceedings by a notice no later than two hours after the petition has been delivered to it or an entry has been made in the file, or within two hours after the commencement of office hours on the next working day if the petition has been delivered or the entry has been made in the file less than two hours before the end of office hours on the preceding working day. By that time, the employer may already know in the insolvency register that insolvency proceedings are pending against his employee.
From the commencement of insolvency proceedings, the effects of the insolvency proceedings can be implemented according to § 109(1)(c) of Act No 182/2006 Coll.. Once an employer learns of an employee's insolvency proceeding, the employer ceases to send deductions for enforcement or execution under this section, but merely deposits the deductions. However, as JUDr. Shubrt mentioned in his lecture at the Spring Seminar 2019 organized by the company Alfa Software s.r.o., nowhere in the law is it strictly stated how the employer should proceed in this case and what he must do. This means that if the employer does not deduct the wages and pays the employee the full wages until the court's decision, it is not at fault.
Based on the outcome of the employee's insolvency proceedings and the court's decision, the deposited deductions will be paid:
- to the beneficiary if the insolvency petition is rejected
- to the insolvency administrator if the insolvency is to be settled by realising the assets
- to the debtor (employee) if a repayment plan is approved.
When the court issues a decision, the insolvency proceedings of the employee end and, if the court approves the insolvency repayment plan, the employer starts making insolvency deductions based on the aforementioned decision and sends them to the insolvency administrator.
AVENSIO Software
Check the insolvency register in the program AVENSIO Software can be done on the employee's tab via the insolvency check icon 
. This check is done via www.justice.cz and the result of this check can be seen in the footer of the employee's card. If the employee has no record on the insolvency register, the footer of the employee's card will show that the employee is No record. Otherwise, information about the record will be displayed on the footer of the employee's card and double-clicking on this information will open the insolvency register, where you can find out the details of the employee's record.
It is also possible in the program AVENSIO Software perform insolvency checks in bulk for all employees via a paid module Bulk check insolvencyin the menu Main menu - Processing - Accessories - Bulk insolvency control. This check runs in the background, and you as the user can carry out normal activities in the program during this check. You will see the result of this check again on the footer of the employee's card.
You can view an overview of the insolvency check result using report number 470411 Insolvency Check Overview. A new feature of this report in the upcoming version of AVENSIO Software will be the ability to check a condition to print a report that contains only active insolvencies.
Another option for insolvency checking is in the My ALFA Customer Zone via the ISIR tab.
An insolvency check can also be done at www.justice.cz.
Insolvency deductions are entered in AVENSIO Software on Employee card on the tab Precipitation as Execution priority. In the Type of execution field, enter Insolvency - amount to be seized or Insolvency - entire income, based on the decision of the insolvency court or insolvency administrator on how the insolvency should proceed.
You can also find more information in our Scheme documents on Deductions and Insolvency Control. These documents are located in the program in the menu Help - Help files.
Sources:
Act No. 182/2006 Coll., on bankruptcy and methods of its resolution, as amended
Breburda, J. JUDr., Execution by deductions from wages, Anag, 2016
Lecture by JUDr. Bořivoj Šubrt at the Spring Seminar 2019 organized by Alfa Software, s.r.o.
