Your company has supplied goods or performed services, but the Bulgarian customer has failed to pay the invoice. Acting promptly may significantly affect the practical prospects of recovery.

Delay may increase the risk that the debtor accumulates further liabilities, disposes of assets or ceases trading.

Is the invoice sufficient evidence?

An invoice is important, but if the debt is disputed, the Bulgarian court may examine the entire contractual relationship. The creditor should establish what was agreed, whether performance was delivered and accepted, when payment became due and whether objections or partial payments exist.

• The contract and purchase orders.
• Delivery notes and acceptance certificates.
• Correspondence between the parties.
• Payment records and acknowledgements of debt.

When is the debtor in default?

Where the contract specifies a clear payment date, the debtor will generally be in default once it expires. Where no due date has been agreed, Article 84 of the Bulgarian Obligations and Contracts Act generally requires a demand for payment.

Statutory interest may be payable from the date of default, subject to the contract and applicable legislation.

The demand letter

• The legal basis of the debt and invoice details.
• The principal and any interest claimed.
• A final period for voluntary payment.
• The bank account and intended legal action.
• The possibility of negotiations or a repayment agreement.

The letter should be served in a manner that allows the creditor to prove both its content and receipt.

Negotiations and repayment agreements

Where the debtor acknowledges the debt, a written settlement should address the amount, payment schedule, interest, consequences of a missed instalment, security and costs. A verbal promise rarely provides sufficient protection.

Bulgarian payment order proceedings

A creditor may apply for a payment order under the Bulgarian Code of Civil Procedure. If the debtor does not object within the statutory period and the other conditions are satisfied, the order may become a basis for enforcement.

Under the current rules, a debtor generally has one month from service of the payment order to file an objection.

What happens if the debtor objects?

A timely objection is not a judgment that the debt is not owed. The creditor may be instructed to bring a civil or commercial claim within the statutory period. Failure to do so may result in the payment order being invalidated.

Interim measures and enforcement

Where the debtor may dispose of assets, the creditor may consider applying for interim measures. They are not automatic; the court examines the conditions and may require security.

A successful judgment does not always result in voluntary payment. Enforcement may be initiated through a Bulgarian state or private enforcement agent and directed against identified assets, subject to Bulgarian law.

Practical checklist

1. Collect the contract and evidence of performance.
2. Confirm the due date and interest provisions.
3. Investigate the debtor’s current corporate status.
4. Issue a provable demand for payment.
5. Consider a secured repayment agreement.
6. Choose the appropriate Bulgarian proceedings.
7. Do not allow the limitation period to expire.

Zdravkov Law Office assists companies with commercial disputes, negotiations, payment order proceedings, litigation and enforcement matters. Further details are available on our home page.

This article is intended for general information and does not constitute legal advice concerning a particular debt.