I hope your "friend" is not asking for financial help from you. DON'T. Credit card companies like Visa/MasterCard etc. are same companies as in USA. Bank loans are also on same principle. However, many Czechs don't understand what CREDIT card means and how to use it do their advantage like wise people do in West i.e. get your gas, and purchases with credit card (get airpoints), pay up when Visa bill comes, never pay interest. They only see amount they are told they can get "credit" for. It just like if you would have max. credit $10 000 and go and get that, spend it and then would be surprised how payments will burden your life ie. interest you never paid attention to. There is nothing different then what you know, they will come and get you in USA too when they - eventually -lose their patience. You probably heard of bankcrupcies, but didn't experience it or don't know anyone who did. Executors also come and get what they can salvage if they cannot get you to pay your loan. Same in CR. However, this is something totally new, which Czechs have no experience with. Under communists there were no credit cards and loans were so soft and full of benefits (i.e. large sums deducted with every child born or studies completed...), that I never heard of anyone who would have problems to pay. There were also not many reasons for loans as real-estate sales as we know then in West were not existent. If you signed any agreements, they were simple, same for everyone, low interest etc. to benefit you. It could in no way be any problem for future. When this Western fenomenom started people continued signing agreements without reading them, co-signing to guarantee the payments for ANYONE who asked them.....and then were upset that loaning institution came and took collateral or whatever they can take to offset unpaid amount (even if it was loan of their neighbour, co-worker or just acquaintance they signed for!!!). This is unfortunately hapenning very often and if you would ask in detail you would find our that rules are same like you know them, except Czechs don't take those rules seriously (or don't even read them) and for that reason repossesion of property hapens much faster and more often than you can imagine. Many, many Czechs are very upset when they have to face responsibility for which they signed. Just think of what would hapen to you if you would get a car and didn't pay the payments. How long would dealer or lending institution let you go on without paying. I bet that they would come pretty fast to reposses it when it still has some value. In case of many Czechs it is television, furniture and small stuff, which seems pretty pathetic and cruel to us. But is it just a same on smaller scale like we would have to face if we would behave same way.
Magan, your commentary on former socialistic Czechoslovakia are usually not very precise. You are mistaken. The real-estate sales existed, were very frequent and principially the same as in the West. You could buy every private or even municipal real-estate (which was for sale, of course). So the reasons for loans existed as well. The main differences: 1) there was only one Bank in Czechoslovakia, that lended money to individuals (Česká/Slovenská státní spořitelna), so your debts could not be too immoderate. Your debts were always corresponding to your income. 2) the Bank took the monthly part-payments directly from your salary. The mechanism was very simple and safe as nobody could evaporated from Czechoslovakia and everybody was an employee (with some exceptions like writers, painters,..., but they were registered). There were no distrainers in Czechoslovakia. You mean special loans from the State in order to support young families and to increase the number of newborn babies, it had nothing in common with a bank bussiness. Some Western European states do the same and are even more socialistic than the former Czechoslovakia. But you are right that some people got used to live under the curatela of the State.
There wasn't much in private hands and not much was moving either. You are very knowledgeable re banking. Basically what I meant was that there was simply no danger of getting into trouble re borrowing money from the bank before. People got used to government "holding hand over them" and now simply realizing when ii's often too late that they are on their own - having to take responsibility for their decisions.
