In today’s globalized economy, many companies and individuals face challenges when dealing with overdue payments from foreign partners or clients. Debt collection in Bulgaria is a common issue, especially for international creditors who are unfamiliar with the local legal system. Understanding the procedures and options available is crucial for successful recovery of outstanding amounts while minimizing costs and risks.
Out-of-court debt collection
The first step in debt collection in Bulgaria usually involves out-of-court negotiations. Creditors often prefer to resolve matters amicably, as this approach is faster, less expensive, and helps preserve business relationships. Out-of-court methods include:
- Reminder letters and notices – Formal written communication reminding the debtor of the obligation.
- Direct negotiations – Phone calls, meetings, or correspondence aimed at reaching a settlement or payment plan.
- Debt collection agencies – Specialized companies authorized to handle communication and pursue repayment without court involvement.
Although out-of-court recovery is not legally binding, it is often effective, particularly if the debtor wishes to avoid litigation or reputational damage.
Court procedures
When negotiations fail, creditors may turn to the Bulgarian courts. The legal framework provides several tools for debt collection in Bulgaria:
- Order for payment procedure – A fast-track process suitable for clear, uncontested debts. Creditors submit an application to the court, and if the debtor does not object within a short period, the order becomes enforceable.
- Ordinary civil claims – If the debt is disputed, the creditor must file a regular lawsuit. The court examines evidence, hears witnesses, and issues a judgment. This process can take longer but provides a final and enforceable decision.
- European Order for Payment – Available to cross-border creditors within the EU, this instrument simplifies debt recovery between member states.
Enforcement of judgments
Once a creditor obtains a court decision or an order for payment, enforcement is carried out by a private bailiff (enforcement agent). The bailiff can:
- Seize bank accounts and receivables
- Garnish salaries or pensions
- Attach and sell movable or immovable property
This stage ensures that the debtor’s assets are liquidated or redirected toward satisfying the debt.
Key considerations for foreign creditors
Foreign creditors pursuing debt collection in Bulgaria should keep in mind:
- Jurisdiction and applicable law – Contracts should clearly specify governing law and competent court. If not, Bulgarian law may apply by default.
- Language and documentation – All documents submitted to Bulgarian courts must be translated into Bulgarian by a certified translator.
- Legal representation – A local attorney is typically required to navigate court and enforcement procedures.
- Costs – Court fees, bailiff charges, and legal expenses are generally borne by the debtor if the creditor wins, but they must be advanced upfront by the claimant.
Practical tips
- Always conduct due diligence on potential Bulgarian partners before signing contracts.
- Include clear payment terms and dispute resolution clauses.
- Act quickly if payments are delayed, as early action increases the likelihood of recovery.
- Consider mediation or arbitration as alternative dispute resolution methods if long-term cooperation is expected.
Conclusion
Debt collection in Bulgaria involves a combination of negotiation, legal action, and enforcement measures. While amicable settlement is preferable, the Bulgarian legal system provides effective mechanisms for creditors to protect their interests. With the right legal advice and timely action, both local and international creditors can successfully recover debts and safeguard their financial stability.
