Debt Collection in Bulgaria

Our debt collection agency in Bulgaria.

We are proud to announce Collect center Ltd as our local collection agency on the spot in Bulgaria who are the ones who will actively work to elicit a payment from your Bulgarian customers.

Could you briefly describe your company?

Collect center is company established of ex-bank problem loans managers. We have the experience and the determination to do our job with best results. Our team is filled up with professionals, that are using best techniques in debt collection. We work with B2B and B2C and offer some other services, that are useful for out clients. We offer full services in debt collection – from the first day of delay till the all possible court actions. We are strongly result orientated.

We are member of FENCA through our national organization – Association of the Collection Agencies in Bulgaria (now with new name – Receivables Management Association – https://rma.bg/en/).

Can you give us an overview of the collection process in Bulgaria / What actions are you taking in the amicable stage of debt collection?

The debt collection in Bulgaria can be divided on two phasis – out of court (or amicable) and court collection – as in many other countries. In the out of court stage we use the full potential of our experts in order to reach the debtor and negotiate repayment of the debt. Every possible way of communication is available for our clients: Letters, phone conversations, sms notifications, viber notifications, on site visits and other. We are always starting with demand “Pay now the whole debt”. It is not always possible, so we are able to negotiate repayments schedules or other way of repayments (if there are).

How does it work in Bulgaria when you need to take legal action?

If the negotiations are fruitless, we make review for possible legal actions. Having in mind, that this is expensive and slow procedure, we always do preliminary evaluation of the potential outcome of the legal actions. We do not propose starting of the this procedure, if there are negative signals from this evaluation – like no assets owned by the debtor, or insolvency procedure of the debtor or else (it depends on the case).

Few key things to know for Bulgarian legal procedure:

• It is slow and from the request (the start) to the moment, that you will be available to do real restriction actions (distrains and other) it is usually from 2 to 6 months.
• It is expensive, but the expenses are refundable if we are successful in the collection (state and lawyers fees).
• There are several ways to do collection – through request for writ of execution and after that with executive case through bailiff. The other common way is with request for insolvency of the debtor, but this is very slow and complicated process.
• Also important thing – If the debtors own money for state fees and taxes, they are with higher priority in the legal stage than other creditors (that does not have mortgages or pledges over assests).

”Judicial” debt collection in Bulgaria.

Our Bulgarian debt collection agency will work hard to get your Bulgarian debtor to pay without the need for legal action, but sometimes it may be necessary to take legal action when a defaulting debtor continues to refuse to pay. Our Bulgarian debt collection partner are knowledgeable and experienced when it comes to legal debt collection in Bulgaria. Here is a brief outline of the framework when you wish to proceed legally with your Bulgarian debt collection case.

Going to court with your Bulgarian debt collection case.

For claims and demands against private individuals, the creditor should apply to the court that has jurisdiction in the area where the person lives. If the debtor is a company, the action should instead be brought before the competent court in the area where the company has its registered office. If the company has an address in several places, the action may also be brought in the place where the department/branch with which the claim arose has its address.

For the vast majority of disputes, the district courts have jurisdiction and the right to hear the disputes. There are some statutory exceptions where the provincial court has jurisdiction. The most relevant example in the context of debt collection in Bulgaria is mainly when the amount in dispute is higher than BGN 25,000. In such cases, the provincial courts are the first instance.

A creditor is not obliged to use a representative to take a case to court. The lawsuit must be in writing, written in Bulgarian, and must be delivered to the court or sent by post to the competent court.

Going to court in Bulgaria, like in most countries, involves certain costs that need to be paid. There is no uniform answer for the cost of taking your case to court in Bulgaria, but it depends on the size of the claim and the costs of the individual proceedings.

Procedure for “order for payment” in Bulgaria.

There is an order for payment procedure in Bulgaria. It is a special legal procedure for claims for a certain amount of money that are not or are not expected to be contested. The idea is that these cases can be dealt with more easily and quickly than complicated civil cases and this makes it ideal for the process of judicial debt collection in Bulgaria.

The procedure is initiated by an application for an order for payment from the creditor. In simple terms, the procedure can be used for situations where the district court is competent to hear the case. That is, claims up to BGN 25 000. There are exceptions but this is the basic rule.

The difference between this procedure and the usual civil procedures is that the debtor is presumed to be liable for payment. After the debtor has been served with the order for payment, he has two weeks to consider the claim and to contest it if he thinks it is incorrect. If the debtor does not contest the claim, the creditor can use the order for payment as a basis for enforcement against his Bulgarian debtor. If the debtor contests and considers the claim to be incorrect, the creditor has the option of transferring the case to the ordinary civil procedure.

A plaintiff does not have to use this procedure but has the same possibility to bring an action in an ordinary civil case.

Enforcement in Bulgaria.

The last step for legal debt collection in Bulgaria is enforcement.

Hopefully, as a creditor, you can avoid this step. Normally, the debtor pays the claim if it has been established by an order for payment or by court proceedings. However, should your Bulgarian debtor still not pay, you will need to apply for enforcement.

Then you get help from the authorities in Bulgaria, which compulsively helps you to get paid by the debtor. The precondition for this is that there is an enforcement order. In the context of debt collection in Bulgaria, a judgment or an order for payment is usually used as an enforcement order.

There are both private and public bailiffs in Bulgaria, but even the private bailiffs work on the basis of a delegation from the Bulgarian state.

The initiation of an enforcement procedure in Bulgaria is done by an application to a bailiff with the enforcement order attached.