Insolvency Law in Bulgaria
Insolvency Law in BulgariaUpdated on Friday 22nd September 2017
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The Insolvency Law in Bulgaria is part of the Commercial Act. This legal document includes the insolvency proceedings and compliance that is required of the debtor in this case.
Companies in Bulgaria may become insolvent for a number of reasons, including economic and business sector crisis, poor management and/or inadequate control, poor investment decisions and even internal conflicts. Regardless of the issue or issues that lead to insolvency, one of our lawyers in Bulgaria can help you if your company is facing business insolvency.
Insolvency in Bulgaria
Insolvency in Bulgaria is included in the Commercial Act and the law in Bulgaria allows only for court-administered insolvency procedures. Insolvency may be initiated against a company that is insolvent or that has outstanding debts.
The insolvency law provides the legal conditions and opportunities for the creditor to recover the debts, at the same time allowing the legal entity to contain its activity (in ideal cases). In practice, most insolvency cases in Bulgaria will end in the liquidation of the insolvent company. This means that all of the company’s assets will be used to pay the debts owed to the creditors.
A first step after the court in Bulgaria has declared that the company is insolvent it to order it to cease its activities. This court order prohibits the company from using any of its assets, as they will be used to satisfy the claim of the creditors. One of our attorneys in Bulgaria can give you more information about the steps you can take after the enforcement of the insolvency order.
Insolvency procedures in Bulgaria
The manner in which the assets of the company are distributed to the creditors is a process that is supervised by a court in Bulgaria. The insolvency administrator will handle this process and will start by creating an insolvency balance sheet, to determine the value of the company’s assets and how they are to be distributed.
Cross-border insolvency cases are solved according to the EU Council Regulation for insolvency, only in those cases in which the debtor has an establishment on the territory of Bulgaria that is in his possession.
Company owners in Bulgaria are advised to go through the insolvency process with assistance from a team of lawyers in Bulgaria.
You can contact our law firm in Bulgaria if you need more information about liquidation and insolvency.