Mortgages and exekuce: when you can borrow again and what happens to your flat

No bank will lend you a mortgage while enforcement proceedings (exekuce) are running, and you could not validly pledge a property anyway, because once enforcement starts you may not dispose of your assets. After it ends, banks usually want the debt repaid and 1–2 years of clean history.

After debt relief (oddlužení, the Czech form of personal bankruptcy) they count 3–5 years from the discharge from the remaining debts, and for the first years after discharge you are still listed in the insolvency register. Exceptions exist, but never straight after the proceedings end.

The second question is often more urgent: what happens to a flat that already has a mortgage on it when enforcement or insolvency arrives. The bank, as pledgee or secured creditor, is paid first from the sale and the other creditors share the rest. It is almost always better to sell the flat yourself than to let it go to auction. With prices of older flats up 14 % year on year (Q2 2026) and the average rate on new mortgages at 5.00 %, that holds twice over, because an auction will not reach the market price.

Looking for something else? Can't pay your mortgage · mortgage after the borrower's death · lien on property · extra mortgage payments

Why nobody lends while enforcement is running

There are three reasons, and they apply at every bank.

1. The Consumer Credit Act (§ 86) requires the bank to assess creditworthiness. A client under enforcement fails by definition: they are not repaying an existing debt, which is already being collected by force.
2. The general disposal ban (generální inhibitorium, § 44a of the Enforcement Code) applies from the moment the notice of enforcement is delivered. The debtor may not dispose of their assets, and that includes creating a lien on a property. A pledge agreement made in breach of the ban is invalid (the executor and the creditors can rely on this), and banks know it.
3. Banks can consult the Central Register of Enforcements (Centrální evidence exekucí) online, so enforcement cannot be hidden. It also shows in the credit register extract, where the enforced debt appears as unpaid.

The only “mortgage” on offer under enforcement is a non-bank loan against your property at a rate many times today's 5.00 % at banks. For someone already under enforcement, that is a route to losing the property, not a way out.

When can you get a mortgage after enforcement ends?

Typically 1–2 years after enforcement ended by recovery; after enforcement discontinued for lack of assets, usually only once the debt is settled. Enforcement ends either with recovery (the debt and costs are paid) or with discontinuation, most often because the debtor has no assets. For a bank the difference is fundamental. Enforcement ended by recovery is a closed chapter; enforcement discontinued for lack of assets means the debt still exists and the creditor can pursue it again.

• Central Register of Enforcements: the executor deletes the record shortly after the enforcement ends with final effect, and from then on banks no longer see it there.
• BRKI/NRKI: the record of the unpaid loan that led to enforcement stays for 4 years after repayment, and for 3 years in SOLUS. How banks treat it is covered in our article on mortgages with a credit register record.
• Banks' own practice: typically 1–2 years after enforcement ended by recovery, with no further arrears, documented stable income and a lower LTV (often 70 % instead of 80 %). Most banks will not consider enforcement discontinued for lack of assets until the debt has been settled.

If the enforcement grew out of a small debt (an unpaid fine, a phone bill) and was recovered quickly, banks are more forgiving than with enforcement over an unpaid loan. You still have to explain it and back it up with documents.

Banks count 3–5 years from the discharge

For petitions filed after the 2024 amendment to the Insolvency Act, debt relief usually lasts 3 years; in older proceedings it was usually 5. It ends with a court resolution on discharge from paying the remaining debts (§ 414 of the Insolvency Act), and that is the date from which banks count. After debt relief with discharge, the current wording removes the debtor from the list of debtors in the insolvency register 3 years after the discharge decision becomes final; otherwise it is 5 years after the proceedings end (§ 425). Every bank checks the register throughout that time.

Do not confuse discharge with the end of insolvency. If the court did not grant discharge because the debtor failed to meet the conditions of debt relief, the debts continue and a mortgage is out of the question.

What happens to a mortgaged flat under enforcement?

Enforcement is usually brought not by your bank but by another creditor, over a consumer loan, unpaid maintenance or a fine. The executor can order the sale of the property even though it is pledged to the bank. The order in which creditors are paid from the auction proceeds is set by law (§ 337c of the Civil Procedure Code). First come the enforcement costs, then the pledgees in the order their liens were registered, which means the bank that has held a lien since you bought the flat. Only after that is the enforcing creditor paid, together with other creditors who have lodged claims.

Auction rules work against the debtor. The lowest bid is two-thirds of the price set by the court expert (§ 336e of the Civil Procedure Code), and it drops in later rounds if nobody bids. Flats therefore often sell well below what an ordinary listing would fetch. If the proceeds do not cover the mortgage, the rest of the debt to the bank remains, now unsecured, and the bank pursues it like any other creditor.

The debt behind the enforcement is often tiny compared with the value of the flat. For small claims the law does not allow the sale of a home where the debtor lives, but once the debts exceed the statutory threshold, an auction is possible even if they are small next to the flat's value.

What happens to the flat in debt relief

In insolvency the bank is a secured creditor (zajištěný věřitel). It is paid only from the proceeds of selling the collateral (§ 298 of the Insolvency Act), and it is the bank's instruction, not the wishes of the debtor or the other creditors, that decides whether the flat is sold. In practice that leads to one of two outcomes.

• The bank instructs a sale. The insolvency administrator sells the flat, by auction or by direct sale with the bank's consent, and the proceeds after costs go to the bank. Any part of the mortgage they do not cover becomes an unsecured claim and joins the debt relief, so after discharge it is written off with the other debts.
• The bank does not ask for a sale. If the debtor keeps paying the mortgage and the bank has no reason to sell the collateral, the flat can stay during debt relief, with the mortgage paid outside the debt relief payment schedule. This is not a right but the practice of some banks, and it is worth negotiating before the insolvency petition is filed.

The “protected dwelling” (chráněné obydlí) rule added to the Insolvency Act from 1 June 2019 (§ 398(6), in debt relief by a repayment schedule combined with realisation of the estate) applies only to unsecured creditors. It does not stop a bank with a lien from selling.

Selling the flat before it goes to auction

1. Talk to the bank as soon as the payments become a struggle, not after the executor's demand arrives. The bank wants its money back, not an auction. As long as you are not deep in arrears, it can offer a payment holiday or a longer term.
2. Get consent to the sale. A property under enforcement can be sold despite the disposal ban if the executor, the enforcing creditor and every creditor who has lodged a claim agree in writing, and the price is not below the usual price (§ 44a(4) of the Enforcement Code). Executors tend to agree, because a voluntary sale raises more than an auction.
3. Sell at market price through an estate agent used to encumbered property, who can explain to buyers what the entries on the title sheet (list vlastnictví) mean: the bank's lien and the enforcement order.
4. Have the purchase price paid into attorney escrow (advokátní úschova), to be split on agreed instructions. The bank is paid first (from a statement of the mortgage balance as at the repayment date), then the executor (the enforced claim plus costs), and you get the rest. Once repaid, the bank consents to deletion of its lien and the executor cancels the enforcement order. Only then does the land registry register the buyer.
5. A buyer with a mortgage is possible. Their bank pays your bank and the executor directly, but it has to agree to the arrangement and often wants the enforcement order cancelled before it draws down.

How long until you can borrow again

If enforcement ends by recovery in October 2026, the record leaves the Central Register of Enforcements by the end of 2026, but the unpaid loan stays in BRKI until 2030. The more tolerant banks become a realistic option in 2027–2028, with LTV 70 % and a higher rate.

If debt relief ends with discharge in October 2026, you remain in the insolvency register for another 3–5 years, depending on the version of the law your proceedings ran under. Some banks will assess you individually from 2029–2030; standard assessment comes once you are off the register.

Use the time in between. Build a clean history (one small loan repaid properly helps more than none), save own funds above 20–30 % of the price and do not apply just to see what happens, because every application leaves an enquiry in the register. To see what your budget can carry at a lower LTV and a higher rate, use the payment calculation: on CZK 3 million over 25 years, the difference between 5.00 % and 5.80 % is CZK 1,426 a month.