Debt Collection Agency Bulgaria: EU Member With Post-Soviet Enforcement
Debt Collection Agency Bulgaria: EU Framework, Developing Enforcement
Bulgaria’s Position
Bulgaria joined the EU in 2007 and adopted the full suite of European enforcement instruments — European Payment Order, European Enforcement Order, European Account Preservation Order. For EU creditors, this means cross-border claims against Bulgarian debtors can be pursued through familiar EU procedures. But domestic enforcement — what happens after you get the court order — still reflects Bulgaria’s ongoing judicial modernisation.
The practical implication: obtaining a title against a Bulgarian debtor is straightforward. Executing that title requires a collection partner who knows the local enforcement landscape.
The Collection Process
Phase 1 — Formal demand. Written demand in Bulgarian (critical — Bulgarian courts and businesses operate exclusively in Bulgarian) citing the contract, outstanding amount, and statutory interest. Bulgaria’s statutory commercial interest rate: the basic interest rate set by the Bulgarian National Bank + 10 percentage points (under the Commerce Act).
Phase 2 — Amicable collection. Bulgaria’s business community is concentrated in Sofia (approximately 50% of all commercial activity), Plovdiv, Varna, and Burgas. Recovery rates for claims under 12 months: approximately 50-60% through professional amicable collection.
Phase 3 — Court proceedings. Bulgarian Regional Courts (Rayonen sad) handle claims up to BGN 25,000 (approximately €12,800). District Courts (Okrazhen sad) handle larger claims. The заповедно производство (order for payment procedure) under Article 410 of the Civil Procedure Code provides a fast-track for documented, undisputed claims.
Phase 4 — Enforcement. Private enforcement agents (частни съдебни изпълнители, introduced in 2006) handle execution. They can seize bank accounts, attach receivables, and sell property. Private enforcement agents are generally faster and more efficient than the state enforcement system — a direct result of Bulgaria’s post-EU judicial reforms.
Insolvency Risk
Bulgaria’s insolvency framework (Commerce Act, Part IV) provides for rehabilitation and liquidation proceedings. The director of a company that becomes insolvent must file for insolvency within 30 days — failure to do so creates personal liability for the director (Article 627 of the Commerce Act). This personal liability provision is a useful pressure point in collection negotiations.
Key Parameters
Statute of limitations: 5 years for commercial claims (Article 110 of the Obligations and Contracts Act).
Language: All court proceedings in Bulgarian. All documents require certified Bulgarian translation.
Bulgaria offers EU enforcement instruments for cross-border claims and an improving domestic system with private enforcement agents. The key requirement: a local collection partner who operates in Bulgarian and knows the Regional and District Court systems.
