Our office gets inquiries on an almost daily basis about enforcement proceedings in Bulgaria. This is related with explanation of the steps that have to be undertaken and the costs payable for the proceedings.
With the present article we would like to outline briefly what must be considered when an action is brought before the Bulgarian courts and what costs are to be expected.
First, the defendant / the debtor/, must be identified - by name, civil registration number (only for Bulgarian citizens), address, VAT registration number. Additionally the claimant/plaintiff must also be identified – if the claimant is a foreign company, an up-to-date certificate of registration with an official Bulgarian translation is requested.
As one of the first steps, it is advisable for us as lawyers to check the creditworthiness of the debtor. If the debtor has no assets worth seizing, it is not advantageous to initiate litigation, because legal proceedings are associated with additional costs for the claimants.
The applicant must also pay attention to the requirement, that the language of civil trials is Bulgarian. This means that all court documents, particularly evidence, must be translated into Bulgarian in advance. The usual fees for a translator in Bulgaria, which can translate legal texts well, usually amount to € 8 per page.
In Bulgaria, the following legal proceedings may be initiated, if a claim is submitted to the court.
I. Procedure for issuing an order for payment
The order for payment procedure is a court procedure that is used to simplify the enforcement of monetary claims and the restitution of movable property. Its object is obtaining of a writ of execution without a legal trial. More about the order for payment in Bulgaria can be read here.
The fees for initiating the procedure for issuance of an order for payment amount to 2 percent of the value of the claim. In addition, the claimant could incur some expenses for attorney’s fees, which depend on the value of the claim.
If the debtor raises objections against the issued order for payment and a trial begins, then, when calculating the costs for the trial, only the state fees paid in the order for payment procedure shall be taken into consideration, whereas the attorney fees shall not be accounted for. If the debtor fails to raise objections, a writ of execution shall be issued in favor of the claimant and on its grounds an enforcement procedure begins, the additional costs for which are described under item IV.
II. Measures to ensure the enforcement of a future claim
The measures to ensure the enforcement of a future claim constitute a court procedure, in which security measures may be imposed by the court with the purpose to secure the claim against the debtor prior to bringing the action before a Bulgarian court. The idea of these measures is to secure the satisfaction of creditors` claims against the debtor. More about the procedure for securing the enforcement of a future claim in Bulgaria can be read here.
The amount of the costs and expenses of this procedure are as follows - attorney’s fees (depending on the claimed sum), court fees in the amount of BGN 40 (only in securing the enforcement of a future claim), the private/state enforcement agent fees (see item IV).
III . Bringing an action to court
A legal trial begins with the submission of a claim to that Court, which is locally and materially competent. All written evidence (including the Bulgarian translation if they are in a foreign language) must be presented by the plaintiff no later than with the submission of the claim to the court.
Costs and expenses for the court trial include attorney’s fees that depend on the claimed sum, court fees amounting to 4 percent of claimed sum, fees for experts ( these depend on the difficulty of the task and the court determines the amount of such a fee), translation costs, travel expenses. These costs are only valid for first instance.
In an appeal court the fee is 50 percent of the fees of the first instance.
IV. Enforcement procedure
An enforcement procedure can be initiated when a writ of execution is issued. The original of the writ of execution is submitted to the execution agent. In the application, the actions that should be carried out by the execution agent must be stated (e.g. in accordance with Article 18 of the Law on private execution agents the following actions can be requested from the agent: to verify the assets of the debtor, to obtain information, to determine the type of enforcement (e.g. enforcement on movable property , real estate , receivables from third parties), to serve an invitation for payment, imposition of a prohibition for disposal with land and property, seizure of a vehicle or movable property, attachment of bank accounts, shares and others.
Costs for attorney fees may arise in the enforcement proceeding, again, these costs are related to claimed sum.
There are fees of the execution agent that have to paid in advance by the creditor, such as charges for the opening of enforcement proceedings, for general verification of the debtor's assets and for the execution and service of the invitation for payment and/or other notices – in the total amount of BGN 120. The fees for attachment of bank accounts amount to BGN 19 per bank (In Bulgaria there are about 33 individual banks), fee for attachment of shares - BGN 15, fee for the imposition of a ban on the transaction of property - depending on the tax assessment of the property.
In relation to a monetary claim the execution agent charges a fee the amount of which depends on the claimed sum. The debtor shall bear the costs for fees incurred by the creditor within the enforcement procedure, as well as the fees, additionally charged by the agent; The abovementioned actions are general, other actions, depending on the subject of enforcement, can also be carried out by the execution agent.