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.

However, if you are the creditor, you must first of all consider that the other party, i.e. the debtor, must be identified - by name, personal identification number (for Bulgarian citizens), address, VAT identification number. This allows us to conduct a credit check on the debtor. If the debtor has no attachable assets who can be object of a garnishment, it is not advisable to initiate legal proceedings, as this would only result in additional costs for the creditor.

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. An address in Bulgaria for the service of court documents is also required, which in most cases is the address of the representing law firm.

It is also important to note that the оfficial language of the proceedings in Bulgaria is Bulgarian. This means that all procedural documents, especially evidence, must be translated into Bulgarian in advance. The standard fees of a translator in Bulgaria who is proficient in translating legal texts start at approximately €8 net per page.

Other costs associated with the proceedings include court fees and attorney fees. The court fee depends on the value of the dispute and amounts to 4% of it. If the subject of the filed lawsuit is of immeasurable value, it is determined by the court and in cases regarding a real estate, may depend on the tax valuation. The aforementioned expenses are reimbursable in the event of a favorable court desicion. However, unlike in Germany, extrajudicial activities such as legal advice, invitation letters, correspondence, etc., are not reimbursed by Bulgarian courts.

One of the most common questions relates to the duration of the proceedings. Unfortunately, we can never predict this. A single instance typically takes 1 to 2 years, but there are numerous cases where, for example, the opposing party is difficult to be located, documents cannot be served, or evidence must be collected in another country. This can significantly prolong the proceedings. Sometimes it can proceed quickly if the defendant does not file a statement of defense or participate in court hearings. This can result in a judgment by default, and the creditor will immediately obtain an enforceable title. However, the default judgment can be annulled if the debtor proves that they were not properly notified.

I. What must foreign persons consider when a lawsuit is filed against them in a Bulgarian court?

Very often, clients approach us after having received a lawsuit concerning a legal dispute initiated in Bulgaria. It is important to note that statutory deadlines usually begin to run immediately after the delivery of the court documents. Therefore, promptly contacting a lawyer is not only advisable but essential.

Depending on the type of proceeding, you typically have 14 days to one month to submit a written answer. However, what is crucial is that during this period, you must submit all evidence and make all statements before the court.

According to the Bulgarian Code of Civil Procedure, if within the established time limit the defendant does not submit a written answer, take a stand, lodge oppositions, contest the truthfulness of a document presented or exercise the rights thereof under Articles 1, 212, and 219 of the CCP, he loses the opportunity to do so later unless the failure is due to special unforeseen circumstances. These steps are so critical that they can change the entire course of the proceedings.

Therefore, we advise you to quickly contact trusted lawyers, summarize the facts, and submit all possible documents and evidence.

Personal attendance at civil proceedings is not mandatory, but there may be situations where the court will require the plaintiff or defendant to testify. With the introduction of Regulation 1783/2020 on the taking of evidence in civil and commercial matters, such testimony can also be taken by a court in a member state, eliminating the need for you to travel to Bulgaria.

II. Types of Court Proceedings in Bulgaria That Are Most Frequently Initiated

In Bulgaria, the following legal steps may be initiated, if a claim is submitted to the court.

1. 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.

2. 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.

Costs and expenses for this procedure include the following amounts:

• Attorney fees (depending on the value of the dispute),
• Court fees of BGN 40 (only for securing enforcement based on a future claim),
• Court bailiff fees (see Item IV).

Another security procedure is the perpetuation of evidence under Article 207 of the Code of Civil Procedure. Its purpose is to preserve evidence for a future lawsuit. If there is a risk that evidence may be lost or taking thereof may be impeded, a party can request its prior collection. Typically, this procedure aims, on the one hand, to inform the future defendant that a lawsuit will be initiated and, on the other hand, to secure evidence in advance that the applicant will rely on in the future. All evidence collected in this procedure will subsequently be used in the lawsuit.

3 . 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.

A specific litigation procedure develops in commercial disputes. Typical for commercial disputes are: the so-called double correspondence, shorter response deadlines and the specific subject matter of the dispute resulting from the capacity of one or both parties - being a commercial.

The procedure for declaring the preliminary contract as a final contract of sale also arouses great interest, as the court decision serves as a title deed. We have described the procedure in detail in the article Preliminary contract for real estate purchase in Bulgaria.

4. Intermediate appellate review

It is particularly important in appellate proceedings that the parties may only introduce new claims or evidence in exceptional cases. Likewise, the subject matter of the dispute may not be changed. In appellate proceedings, the court fee amounts to 50% of the fee for the first instance.

It should be noted that if the decision is in your favor but the opposing party files an appeal, you must participate again in the hearing and defend yourself, as the appellate court may overturn the first instance's decision. In this case, you only have to bear attorney fees unless you file a cross-appeal because the state fees are borne by the party filing the appeal. Costs for collecting of evidence at this stage of the proceedings are only possible in cases of exceptional circumstances.

5. 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.

Legal fees can arise as costs for initiating enforcement proceedings, depending on the amount in dispute.

There are fees of the execution agent that have to paid in advance by the creditor, such as fees 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.

When enforcing a monetary claim, the enforcement agent charges a fee, the amount of which depends on the amount of money claimed. The fees paid in advance by the creditor, as well as the enforcement agent’s fee in proportion to the claim, are borne by the debtor, whereby the amounts paid in advance are refunded to the creditor after the debt has been recovered. These are only general actions, other actions, depending on the subject of enforcement, can also be carried out by the enforcement agent.

Various other court proceedings such as partition, notarial proceedings, summary proceedings in labor law cases, arbitration proceedings, etc. can be discussed in a separate article as a continuation of this article.