Debt Collection in Bulgaria

Debt Collection in Bulgaria

Updated on Friday 07th June 2024

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Debt Collection in Bulgaria
Debt collection is the process through which a business or an individual seeks to recover undue payments from clients. Business owners who find themselves in need of pursuing due payments can commence a process of debt collection in Bulgaria. Whenever thus step if needed, it is advisable to seek specialized help in order to perform all the necessary legal procedures for recovering the existing debts.
Our Bulgarian lawyers can represent you or your company if you need to take legal actions for existing debts. The Bulgarian National Revenue Agency is the authority in charge of debt collection in this country. The first step in debt collection, as set forth in the procedures issued by the relevant authorities, is to convince the debtors to pay their debts by withholding certain benefits from them if they do not pay their dues (for example, withholding the necessary documents for obtaining bank loans).

Legal steps for debt collection in Bulgaria

Companies in Bulgaria that need to collect overdue payments have two options for debt recovery: they can choose to resolve the issue out of court or they can start the needed court proceedings for recovering debts. The list below describes the main steps that can be attempted as a pre-court solution.
  • Contact the debtor: this serves merely as a first and friendly reminder that a payment is overdue and you are looking towards collecting that payment.
  • Send a second overdue reminder: should the debtor refuse to take action after the first reminder, you can contact him again and request the payment;
  • Send a final notice: if the first two reminders still haven’t determined the debtor to make his payment, you can send a final notice that also includes an intention to commence formal debt collection proceedings;
  • Contact a debt collection agency: this can be done if you do not wish to take the case to court and are looking for alternative debt collection solutions.
  • Additional details about debt collection
  • Businesses should keep in mind that in some cases it is preferable to negotiate with the debtor and even institute a payment scheme. This can be done if the particular business relationship is an important one.
We remind you that each case is different and you might need to seek adequate counseling in order to determine the most suitable debt collection practice in your case. Moreover, our team of lawyers in Bulgaria can answer any particular questions related to your case.
You can contact our law firm in Bulgaria for complete debt collection assistance. Our lawyers can offer you complete solutions, tailored to your particular needs.

Recognition of EU Court Decision in Bulgaria

When a EU court hasissued a final decision concerning a legal matter, including on debt collection, the respective decision has legal power at the level of the EU member states. However, the claimant has to conclude a set of steps in order for the court decision to be recognized at the level of a specific EU country. 
Still, it is necessary to know that the each EU country, including Bulgaria, can have the right of opposing to the respective EU court decision, but this can apply in exceptional situations. Those who want to benefit from the recognition of a EU court decision in Bulgaria have to perform specific steps, as the decision itself is not automatically recognized in the respective country; the next procedures are necessary in this case: 
  1. the claimant who has obtained a final EU court decision has to address to the enforcement authorities that are established in Bulgaria;
  2. in the case in which the claimant is involved in a procedure of debt collection in Bulgaria, he or she has to provide certain documents to the Bulgarian authorities;
  3. thus, it is necessary to provide a certificate stating the validity of the judgment issued in a EU country, as well as a copy of the judgment itself;
  4. even in this case, the debtor located in Bulgaria has the right to oppose to the decision and to refuse the legal grounds on which the decision was taken;
  5. the main rule of law which refers to the recognition and the enforcement of EU court decision at the level of the EU member states is given by the Brussels Regulation; 
  6. the enforcement of a decision taken in a EU court can be done through the European Enforcement Order.
Here is also an infographic on this subject:
Debt Collection Steps in Bulgaria

How is the Brussels Regulation recognized in Bulgaria?

The Brussels Regulation (Regulation 1215/2012) is recognized at the level of the member states of the EU, Bulgaria included. The legislation benefits from a direct enforcement into the Bulgarian legislation through the Code of Civil Procedure (Article 622a), which stipulates that a decision ruled by a EU court is legally recognized under the local legislation; our team of debt collection lawyers in Bulgaria can provide an extensive presentation on the provisions of the law, which refer to the following: 
  • since the decision taken by the EU court is recognized in Bulgaria, the enforcement shall be carried out by a local bailiff;
  • however, this procedure may be commenced only at the request of the claimant;
  • as presented above, the Bulgarian debtor has the right of refusing the respective order; 
  • thus, the debtor is entitled, in a period of maximum one month since he or she received the debt notification, to refuse the enforcement procedure;
  • if the document is written in a foreign language, the debtor is entitled to receive a translation of the judgment.
Provided that the debtor refuses to pay the debt, he or she has the right of appealing the case to a local court. As a general rule, the procedure is done through the provincial court where the debtor has his or her permanent/registered address. In the case in which the Bulgarian debtor does not have a registered address in Bulgaria, the application has to be done through the Sofia City Court. 
An appeal on the case can take place at the Sofia Court of Appeal and this is done through the provincial court were the case was first held. The provincial court in Bulgaria may issue a decision in the favor of the claimant, stating that there are no legal grounds for refusing the EU court decision, or it may state that the enforcement procedures should not be started. 

Enforcement of a Court Decision in Bulgaria

The enforcement of a court decision in Bulgaria designates the final stage of a proceeding in which a creditor and debtor participated. The enforcement of a court decision represents one of the last steps for debt collection in Bulgaria, through which a claimant benefits from a positive ruling against a debtor.
The enforcement of a court decision generally refers to civil and commercial matters, but this legal procedure can also be used for cases that fall under the regulations of the criminal law. Our debt collection lawyers in Bulgaria can provide an extensive presentation on the procedure and can assist creditors and debtors with advice on the rights they have during the enforcement of a court decision issued in this country. 

What assets can be subjected to enforcement in Bulgaria?

The enforcement of a court decision in Bulgaria usually takes place when the debtor did not want to avail specific assets in order to cover the debt he or she had towards a creditor. Thus, the court decision is issued with the purpose of covering the respective assets. However, when entering this legal procedure, the debtor must be aware that debt collection in Bulgaria in this case can refer to assets such as: 
  • movable goods, wages, income obtained from immovable property;
  • income obtained from immovable property, rental income included;
  • financial assets held in bank accounts and the person’s immovable property;
  • provided that the person is involved in a business activity, his or her shares or bonds can also be subjected to enforcement in Bulgaria;
  • various items that are considered immovable or movable property (marital property included).

Are there any assets that can’t be subject to enforcement in Bulgaria?

Yes, the legislation on debt collection in Bulgaria stipulates that a wide range of assets can’t be taken away from the debtor. The Council of Ministers in Bulgaria created a list that presents the types of assets the court can’t take away from the debtor, regardless of the amount he or she has to pay to a claimant. Our team of debt collection lawyers in Bulgaria can provide an extensive presentation on the subject, but parties interested in this subject should know that the follow will apply: 
  1. objects that are used by the debtor and his or her family as household goods;
  2. the food necessary for the debtor and his or her family (estimated for an entire month);
  3. the fuel needed for various household utilities, calculated for a period of three months (for the debtor and his or her family);
  4. machinery and any other similar goods that are used by the debtor in order to develop his or her business activity or professional occupation;
  5. various parts of properties, such as land, dwellings or livestock needed in the case in which the debtor is a farmer.

How can a judgement be enforced in Bulgaria?

Bulgaria is a member state of the European Union (EU) and most of its rules of law have been harmonized with the EU law. In the case of foreign judgments related to the enforcement of a court order that was decided in a EU member state, the Bulgarian law stipulates that no special procedures have to be completed in order for the decision to be recognized here. 
In the case of judgments that were ruled outside the EU, the primary rule of law is the Private International Law Code, alongside with specific treaties to which Bulgaria adhered. Our debt collection agency in Bulgaria can offer more information on this subject. 
Parties interested in the enforcement of a court decision in Bulgaria should know that the judgment will be carried out based on a writ of execution, a document which is issued after the final court judgement. The enforcement procedure can be carried out by state or private bailiffs. In the case of the private bailiffs, the main rule of law regarding their activity is given by the Private Judicial Enforcement Act. 
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What happens after an enforcement is issued by the Bulgarian court?

Once the Bulgarian court issued the decision to seize the assets of a debtor in Bulgaria, the bailiff will have to notify the debtor regarding the date in which an inventory will be made on his or her property. In the case in which we refer to an immovable property, the Bulgarian property registry institution will receive a seizure notification from the court which issued the enforcement procedure. 
Since the moment when the debtor is notified regarding the commencement of the enforcement procedure, he or she no longer has the right of disposing of his or her assets, by any means. We invite those interested in finding out more information on the applicable law to contact our team of debt collection lawyers in Bulgaria, who can also represent local and foreign persons in front of a local court.