Debt Collection in Bulgaria

Debt collection in Bulgaria mainly refers to the process of collecting due payments from debtors and defaulting payers.

The debt collection process is divided in a few steps which can be out-of-court, pre-litigation or litigation. The first way is said to be the faster and also cheaper way, but sometimes when the debtor does not want to cooperate there is a need to involve the court.

There are legal steps that are a must in order to successfully collect the debts.

No matter which of the following ways you choose to stick up to, you have to keep in mind that there are a bunch of documents regarding the debtor that are necessary to have, in order to proceed. The existential minimum of needed documents is – agreements and all the correspondence with the debtor and also the debtor’s identification details. You need a qualified assistance from a Bulgaria lawyer.

Out-of-court steps

  1. First of all, you have to contact the debtor and make sure that he / she is aware of the fact that he is owning an outstanding payment. This action is considered as a reminder note that a payment is overdue and you are willing to collect it.
  2. If this first contact didn’t work and the debtor still doesn’t want to pay, then you can proceed to the next step – sent him an official letter. This is applicable if there is no written arrangement on the payment terms, e.g date of payment is not clear so the overdue of the debt is not certain.
  3. Those two steps are serving as an official notice in which you state that you are looking out for a non-court solution of the problem.

In-court steps

  • If those previous steps don’t really occur to be successful, there are two choices are available – 1. Pre-litigation and 2. Litigation.
    • Pre-litigation is in the most cases completed within no more than half a dozen months. In this phase there isn’t a requirement for court hearings and the creditor is obliged to present to the court only a small amount of documents and invoices. There is a 2% fee of the claimed amount which is a commission for the court. When the claimant’s application is reviewed by the court, it issues an enforcement order, which is sent back to the debtor. If in the deadline for appeal there is no objection, then the court proceed and issues a writ of execution, which can be executed by a bailiff or a private enforcement agent. If the debtor occurs to misbehave and objects to the claim then there is only one option – a standard court claim, also called litigation.
    • Litigation – There isn’t a rule which states that you are obliged to first initiate the pre-litigation and then the litigation. It is possible to initiate litigation directly. Talking about court fee, here it is 4% of the claimed amount, but if the pre-litigation is followed by a litigation procedure, then the fee is only 2%, due to the previously paid 2% for the pre-litigation.

It is highly recommended before moving forward to any debt recovery proceedings to make sure that the assets of the debtor are secured. This is important, because there are cases in which the prosecuted one is not willing to cooperate, to fulfill his creditors willing, and he even attempts to sell, donate or transfer ownership of his property to his friends and family. There are legal actions for returning sold or donated property back.

Law enforcement procedure as part of debt collection in Bulgaria

The court’s decision (the judgment of the court) can be enforced and the due amount collected.

The enforcement proceedings in Bulgaria are conducted by public bailiffs or private enforcement agents, but you need an attorney at law to represent you and support you in these procedures.

If you have valid and in force court judgment from a court based in another member state of the European Union against a company or a person, based in Bulgaria, then this judgment/decision can be enforced in Bulgaria and the debt can be collected without needing to go through a court proceeding in Bulgaria. However, in this case you would also need an assistance from a local attorney at law.

Author of this article is Simeon Bozhinov.

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