Debt Collection in Bulgaria
Do you have a Bulgarian customer who has not paid their invoice? No problem, we can help. Through our foreign debt collection platform, you can get paid quickly and easily. Read on to see how.
Debt collection in Bulgaria can be tricky when you are abroad.
We are well aware of the problems and frustrations of having customers in other countries who do not pay. It is tough to convince a debtor abroad to pay. To make it easier for international creditors, we at Oddcoll have created a debt collection platform that connects them with the best national and international debt collection agencies and law firms worldwide. For you, this means having an experienced, high-performing Bulgarian debt collection agency that can begin debt collection in Bulgaria immediately.
Our debt collection agency in Bulgaria
We are proud to announce Collect Center Ltd as our local collection agency in Bulgaria, which will actively work to elicit payment from your Bulgarian customers.
Could you briefly describe your company?
Collect Center is a company founded by former bank problem-loan managers. We have the experience and determination to do our job to the best of our ability. Our team comprises professionals who use the most effective debt collection techniques. We work with B2B and B2C clients and offer additional services that are useful to our clients. We provide comprehensive debt collection services – from the first day of delay through all available court actions. We are strongly results-oriented. We are members of FENCA through our national organization – Association of the Collection Agencies in Bulgaria (now with a 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 at the amicable stage of debt collection?
The debt collection in Bulgaria can be divided into two phases – 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 form of communication is available to our clients: letters, phone conversations, SMS notifications, Viber notifications, on-site visits, and more. We always start with the demand: “Pay now the whole debt.” It is not always possible, so we can negotiate repayment schedules or other repayment options (if available).
How does it work in Bulgaria when you need to take legal action?
If the negotiations are fruitless, we will review possible legal actions. Having in mind that this is an expensive and slow procedure, we always do a preliminary evaluation of the potential outcome of the legal actions. We do not propose starting this procedure if there are negative signals from this evaluation, such as no assets owned by the debtor, an insolvency procedure for the debtor, or other factors (depending on the case). A few key things to know about the Bulgarian legal procedure:
- It is slow, and from the request (the start) to the moment you are available to perform real restriction actions (distrains and others), it is usually 2 to 6 months.
- It is expensive, but the expenses are refundable if we are successful in the collection (state and lawyer’s fees).
- There are several ways to collect – through a request for a writ of execution, and, after that, through an executive case with a bailiff. The other common way is to request the debtor’s insolvency, but this is a lengthy and complex process.
- Also, an important thing: if the debtors have funds for state fees and taxes, they have a higher priority in court than other creditors (who do not have mortgages or pledges over assets).
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. Still, sometimes it may be necessary to take legal action when a defaulting debtor continues to refuse to pay. Our Bulgarian debt collection partner is knowledgeable and experienced in legal debt collection. Here is a brief outline of the framework for proceeding 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 authority to hear them. There are some statutory exceptions where the provincial court has jurisdiction. The most relevant example in the context of debt collection in Bulgaria is when the amount in dispute exceeds 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, in Bulgarian, and delivered to the court or sent by post to the competent court. Going to court in Bulgaria, as in most countries, involves certain costs that must be paid. There is no uniform answer for the price 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 the payment procedure in Bulgaria. It is a special legal procedure for claims for a specific amount of money that are not, or are not expected to be, contested. The idea is that these cases can be handled more easily and quickly than complex civil cases, making them ideal for judicial debt collection in Bulgaria. The procedure is initiated by the creditor’s application for an order of payment. In simple terms, the method can be used when 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 the debtor. If the debtor contests the claim and considers it incorrect, the creditor may transfer the case to 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. Typically, 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 Bulgarian authorities, which compel the debtor to pay you.
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 private bailiffs operate under a delegation from the Bulgarian state.
The initiation of an enforcement procedure in Bulgaria is made by applying with a bailiff, accompanied by the enforcement order. We can help you with debt collection in Bulgaria. Contact us if you have any questions, or start a case simply by creating an account and uploading your unpaid Bulgarian debt. Then our Bulgarian debt collection agency will immediately begin working on your case.