Top-Rated Debt Collection Agency in Bulgaria
Fast and reliable debt collection in Bulgaria - no upfront costs, only pay for success. Request a FREE Consultation or upload your claim today.
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Reclaiming your debt in Bulgaria made simple.
Debitura focuses on debt recovery in Bulgaria and offers a wide array of services, such as managing receivables, issuing debt collection notices, conducting pre-legal and legal debt collection, and organizing enforcement court proceedings. Our skilled professionals possess in-depth knowledge about the laws and regulations concerning debt collection in Bulgaria, which enables us to cater to our clients' needs and assist businesses in recovering their unpaid debts quickly and competently.
From beginning to end, you will receive extensive support.
Tailored approach for debt recovery.
We have a team of over 500 specialists dedicated to global debt recovery.
Our debt collection services have a success rate of 87%, while being priced at the lowest cost.
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Ivanov and Yonkova Law Firm is a reputable legal practice on the Bulgarian market. We provide legal advisory services to our clients small and medium sized enterprises with high quality and with special attention to each and every relevant detail.
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Attorney Yulia Danova provides first-class and affordable legal services to local and foreign private clients. Our team is made up of highly qualified specialists in various areas of debt collection law.
We at Law firm “Ivanchov & Partners” walk hand to hand with our clients. Our accent is focused on honesty, dedication, experience, ambition and our main goal is maximum results for our clients. Our advice is pursuant on our individual needs and definitions of success. For us trust must be earned. Legal advice is a matter of confidence. We take the success of our clients as a something much more than just a job, but a task to for securing their future.
Liliana Bakayoko is an international business law firm with a main office in Paris and a secondary office in Sofia. The firm’s founding partner is a Doctor of Law with 20 years of experience as an international business lawyer and ten years of experience in teaching law.
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Dichko Yanev Law Firm is a legal practice, offering a personal service to individuals and companies, putting their interests first.
Your trusted legal advisor for all aspects of your business and debt collection
Reliable Debt Collection Services: We are a law firm dedicated to providing effective debt collection solutions to businesses and individuals. Our experienced attorneys use legal strategies to recover outstanding debts while maintaining positive relationships with our clients.
We have extensive track record in working with banks, investment funds, companies and foreign investors. We have special expertise in lending, leasing, debt collection, investment techniques, real estate, infrastructure (energy and water), labor law and related legislation. We are successful litigators.
The ultimate guide about debt collection in Bulgaria
If you are owed money by a business or person in Bulgaria, we can help you get your money back! We have helped many other businesses in Bulgaria get money they were owed, and we can help you too.
It can be difficult to collect a debt in Bulgaria because of language and cultural differences, different laws and customs, and because it is far away.
When you use a collection agency that knows the laws and customs of the country where the person you are trying to get money from lives, it will be easier to get your money back.
At Debitura, our goal is to help you get your money back while still preserving a good relationship with your customer. Our strategic public relations efforts are fair, but firm-ensuring your reputation is our top priority! If you want to understand the Bulgarian debt collection process from beginning to end, continue reading this guide. If you prefer working with a local law firm that specializes in debt recovery in Bulgaria, we are here to help.
Debitura is a website that helps you to collect your debt in Bulgaria and many other countries. To begin, upload your claim onto the website. Within one day, we will review your case and give you three free quotes from local debt collection lawyers in Bulgaria. We use both people and technology to get the results you need while still keeping good relationships with customers. Our network of people who help with debt, law, getting supplies, and selling things are important to us and help us do our job well.
Upload claim
Begin the debt collection process in Bulgaria now, without any charge. Simply make a free profile and upload your case in just 2 minutes.
Pre-legal
We use a proven pre-legal recovery process to collect your claim during the first 3 months. Our approach is 100% no-cure-no-pay.
Legal
"If your debt remains unpaid during the pre-legal phase, we'll connect you with three quotes from our nearby debt collection attorneys."
24/7 updates
You get access to our online portal where you can track your case in real-time
Introduction to collecting debt in Bulgaria
Are you having a hard time getting paid by your customers in Bulgaria? Do not worry; we can help you collect the debt easily.
The person who owes money is called the debtor. The person who gave them the money or invoice is called the creditor. If the creditor collects the debt themselves, it's called first-party collection. If they give the process of collecting to someone else, it's called third-party collections.
- The average domestic company takes more than 30 days to pay its invoices, but this usually does not go over 40 days. However, about 25% of invoices are not paid on time. Even so, most of them are still collected successfully. In Bulgaria, there are many companies that offer collection services.
- Legal collection has some details that are different from other EU countries, but not many. The main problem is that it takes a long time, and it is also expensive. The best way to collect the money you are owed is to work with a company that gets paid only if they are successful.
- Insolvency does not seem to be a very effective method for collecting money that is owed. This means that creditors, or people who are owed money, often do not get any money back when insolvency proceedings are used. It takes a long time, usually more than three years.
Days Sales Outstanding (DSO)
The people in a contract can agree to any date. In contracts where no date was set, the person who is owed money may ask for the money right away.
The people involved in a commercial transaction may agree that someone will pay for something within 60 days. But if they need more time, they can agree to a longer time limit. This is only allowed if it is not unfair to the person who is owed the money or if it goes against good morals. If the people involved in the commercial transaction did not agree on a fixed time limit, then the person who owes the money has 14 days to pay from when they get an invoice or payment reminder.
Common payment types in Bulgaria
You can pay with cash or by bank transfer. If you pay with cash, you can only pay up to approx. EUR 5000
Main corporate structures
There are different types of companies that the law in Bulgaria recognizes.
- A general partnership is a company that is formed by two or more people. The people in the company work together to do business under a common name. All of the partners in the company are liable for any debts or losses that the company might have.
- A limited partnership is a company created by a contract between two or more people. They agree to do business together under the same name. For the company's debts, some partners are responsible for everything and other partners are only responsible for part of it.
- Limited liability company;
- Joint stock company;
- A limited stock partnership is a company that is created by a contract. The people who contribute money to the company get stocks in return.
- Non-profit organizations that provide legal services.
The debt collection process in Bulgaria
In Bulgaria, there are usually multiple steps in the debt collection process. The image below shows the standard process for collecting debt in Bulgaria:
1 Upload your claim:
If you want to find someone to help you get your money back, you will start by finding a debt collection partner. You will give them some information about the money you are owed, and they will help you try to get it back. If you use Debitura, we will give you 3 quotes from local partners in the European country where your case is. This service is free - there is no catch.
2 Amicable collection:
Debitura will try to contact the person who owes you money in different ways. We will try to email, text, and write letters. The goal is to get the debtor to agree that they owe the money and start a plan to pay it back. Debitura's no-cure-no-pay solution means that you only have to pay a small success fee if we are able to collect the debt. This means that there is no risk for you!
3 Evaluation:
If you have not received payment from the debtor after trying to work it out, it is time to evaluate what to do next. We will look at how much money you are owed, the chances of getting paid and other factors to help you decide what to do. There are three typical next steps:
A Surveillance:
If you are owed less than 2,000-5,000 Euros, it is often not worth it to take any more legal action. In this case, we recommend "debt surveillance." This means that we will keep trying to contact the person who owes you money and try to come to an agreement about payment.
B: Legal collections:
It's a good idea to use the legal system for bigger problems. However, the specific steps you need to take depends on what kind of problem you have and how big it is. Usually, it takes around one and a half to one and half years for the whole process to be finished.
In simple terms, if you have a big problem that can't be solved easily, it's best to go through the legal system. However, the steps you need to take will vary depending on the nature and size of the problem. The legal process can take a long time, around a year and a half, on average.
C: Debt enforcement:
If the person you are owed money from has agreed that you are owed money, or if there is a court order, you can use the bailiff's court to get your money.
At Debitura, we can help you with all three steps in Bulgaria.
Amicable collection in Bulgaria
At Debitura, we offer a 100% risk-free and efficient process for Amicable collections. This means that you can submit your claim to us, and we will get started on it within 24 hours.
We will contact your debtor in Bulgaria using all available methods, which may include email, text messages, letters, phone calls, and social media.
The goal of this process is to:
A) make the debtor pay the full amount or
B) make the debtor agree that they owe money and start a plan to pay it back
If the person you are trying to get money from has said that your claim is not true, you cannot try to work it out peacefully. You must start with legal collections.
Late Payment Interest
If someone does not pay money they owe, they have to pay more money as a punishment. This extra money is called interest, and it is 10% of the original amount owed every year. This rule applies to anyone who is late on a payment, even if the people involved in the original agreement thought that a different interest rate would apply.
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Get started with
amicable debt collection
Upload your claim and get started with our 100% no-cure-no-pay collection solution.
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Legal collection in Bulgaria
If you have not been paid during the amicable phase or the debtor disputes your claim, we will provide you with 3 free quotes from our local debt collection attorneys. In the legal phase, our local attorney will reach out to your debtor and try to negotiate a payment. Our partners can also go to court and get a payment order via the legal system in Bulgaria. This payment order can then be used to enforce your claim via enforcement court.
Ordinary proceedings
There are different types of court proceedings in Bulgaria.
- A claim proceeding is a lawsuit that happens in public. There are hearings, witnesses, and court experts who ask questions.
- Claim security proceedings are court proceedings that happen quickly. The debtor does not participate. The purpose is to stop the debtor from using their property before regular claim proceedings start.
- Evidence securing proceedings are court proceedings that happen before regular claim proceedings. They are meant to help get evidence.
- Warrant proceedings are court cases that are supposed to be resolved quickly. They are for claims that are not disputed.
- Insolvency proceedings;
- Stabilization proceedings.
- Private and state bailiffs are responsible for carrying out execution proceedings, while arbitration courts are responsible for conducting claim proceedings.
Bulgarian law says that people can agree to anything they want in a contract. This is only allowed as long as what they are agreeing to does not go against the law. There are rules about most of the different types of contracts that people can make.
If there is a disagreement between the people, they can go to court. If both people agree, they can go to an arbitration court instead. An arbitration court is when one person decides the outcome of the disagreement. A state court is when there are 3 people who decide the outcome of the disagreement.
Bailiffs are people who make sure that final court decisions and arbitration awards are carried out. They follow explicit procedures in execution lawsuits.
The amount of money you will need to pay a lawyer depends on how big and complicated your claim is. To get the best price, it is a good idea to ask more than one lawyer for their prices so that you can compare them. You can do this easily by using Debitura.
Get started with
legal debt collection
Upload your claim and get 3 FREE quotes from our local collection partners.
Debt enforcement in Bulgaria
If the person you are owed money from has written down that they will pay you, or if there is a court order, you can go to the bailiff's court in Bulgaria to get your money.
Court decisions may be enforced when they enter into force (when they are final). However, there are some exceptions to this rule.
- Some first instance court decisions can be enforced right away without the other person having a chance to object (alimony, labor remuneration).
- This means that the court may allow the person who won the case to start enforcing the decision right away, if they ask for it.
- Appeal court decisions can be enforced, even if they are not final.
- Private bailiffs and state bailiffs help to make sure that court decisions are carried out.
The way to do this and how much it will cost depends on your situation. You can tell us about your situation on Debitura, and we will give you 3 different quotes to choose from within 24 hours.
Get started with
debt enforcement
Upload your claim and get 3 FREE quotes from our local collection partners.
Insolvency proceedings in Bulgaria
If the person you owe money to cannot pay you back, there is a final process you can start called an insolvency procedure. The goal of this is to sell the things the debtor owns and give the money to the people he owes, following a set order of importance.
- Out-of-court proceedings: Initiation of insolvency proceedings does not require engaging in out-of-court negotiations. Additionally, negotiations between the creditor and the debtor are also possible after a claim for opening of insolvency proceedings has been submitted until a court decision is issued for opening of the insolvency proceedings.
- Restructuring the debt: Debt restructuring may be achieved either as a result of out-of-court negotiations (prior to the court issuing a decision for opening of the insolvency proceedings) or through the adoption of a recovery plan, approved by the court (after a decision was issued for opening of
the insolvency proceedings). - Winding up Proceedings: Winding up proceedings initiate when a company terminates its activity. A liquidator is appointed (usually the manager of
the company) who obliged to complete any pending transactions, to collect debts due, to convert remaining company's property into cash and satisfy creditors. However, winding up procedure may not be initiated by creditor and process assets liquidation and satisfying creditors in winding up procedure is not identical to same processes being carried out in an Insolvency Procedure.
European Late Payment Directive in Bulgaria
Bulgaria is part of the European Union (EU), which means that the Directive 2011/7/EU on combating late payments across Europe in commercial transactions applies to Bulgaria.
The directive contains the following main points:
- Public authorities cannot require that people pay for something in more than 30 days.
- Private companies cannot require payment terms of more than 60 days.
- If the person you lent money to is a business, you can charge them an extra €40 for paying late.
- The interest rates for late payments must be at least 8% above the European Central Banks reference rate.
Credit risk and payment behaviour in Bulgaria
- Economic growth in Eastern Europe is projected to remain solid this year, despite losing steam mainly because of poor growth prospects for Turkey.
- The key drivers of growth in the region remain a resilient domestic demand and rising wages. On the export performance side, uncertainties surrounding global trade are weakening trade prospects and casting a shadow on business confidence.
- To support domestic and export trade, respondents in Eastern Europe offer customer credit more often than last year . Suppliers surveyed in Eastern Europe transacted on average 67.2% of the total value of their sales to B2B customers on credit (up from 38.8% one year ago). The sharp increase in the proportion of credit-based sales in Eastern Europe is highly likely to be caused by business efforts to sustain domestic demand, which appears to be the key driver of economic growth.
The analysis is concluding that the risk of doing business in Bulgaria is medium-low. Based on this medium-low score, we recommend being careful providing credit and considering charging upfront payment or using credit insurance when trading if you don't know the customer in Bulgaria well. If possible, provide a short credit period or even better upfront payment. The medium-low risk score is based on the following factors:
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The economic risk in Bulgaria
Economic risk in Bulgaria is medium-high (4 out of 6). An economic risk of 4 out of 6 is relatively high in Europe.
GDP and economic growth are critical drivers for economic risk.
The GDP of Bulgaria is 80,27 bn. USD (2021), growing by 4,18% per year.
In terms of the size of its economy, Bulgaria ranks #67 out of 183 countries and has a medium-sized economy.
Having a view at the growth rate, it is ranked #99 out of 183 countries and is therefore considered an excellent growing economy.
GDP per capita is 11635 USD, ranking Bulgaria number #59 out of 183 countries. This means the purchasing power of citizens in Bulgaria is high compared to the rest of the world.
You can see a more throughout picture of GDP and economic growth in Bulgaria in the table below:
Another huge impact for the economic risk score is the inflation rate and the interest rates. You can see a more throughout picture of monetary KPIs in Bulgaria in the table below:
The inflation in Bulgaria was 3,3% in 2021 which is considered a low inflation rate.
Businesses has an interest rate which is 4,12%.
The business environment risk in Bulgaria
Our analysis shows that the business environment risk in Bulgaria is medium (3 out of 6), which is a relatively high risk score in Europe.
Economic freedom and rights has a big influence on the business environment risk in a country. Take a look at the important facts for Bulgaria in the table below:
As you can see in the table, the property rights index is 66 in Bulgaria, which is considered quite low in Europe.
The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 63 in Bulgaria, a quite low score for a country in Europe.
Bulgaria's overall economic freedom index is 70 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.
The political risk in Bulgaria
The political risk in Bulgaria is low, with a score of 2/6. This is a pretty average political risk score in Europe.
The governance and political stability indicators are critical drivers for political risk. An overview of Bulgaria can be seen in the table below:
The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.
When doing business in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.
In Bulgaria, the rule of law index is at -0,04 points, with the score going from -2.5 (weak) to 2.5 (strong). Bulgaria has, therefore, a low rule of law index, which means it often is very difficult to enforce your contracts. We, therefore, recommend avoiding credits and recommend charging upfront payment instead.
Other drivers for the low political risks are the very weak control of corruption, the weak political stability index, and the medium-large shadow economy that is 20,83% of Bulgaria's GDP.
The commercial risk in Bulgaria
In Bulgaria, the commercial risk score is 2/4, which in our model is a low score. This low commercial risk score is relatively low compared to the average in Europe.
The commercial risk is impacted by a country's international trade relationships. You can see some of the key facts for Bulgaria in the table below:
Bulgaria has a total of foreign exchange reserves of 39.19 bn. USD.
Bulgaria has a positive trade balance of 1,08% of GDP. This means that Bulgaria imports fewer goods and services than the country exports.
The annual growth of exports of goods and services has been growing 9,9% annually - now 63,03% of GDP. Import of goods and services represents 61,95% of the GDP in Bulgaria.
The financing risk in Bulgaria
We have calculated the financing risk to be 2/4, which equals a low risk. A low financing risk score is pretty average for countries in Europe.
The country's banking system, efficiency, and stability influence the financing risk. You can find the critical facts for Bulgaria in the table below:
In Bulgaria, the credit information sharing index is 5 on a scale from 0 (low) to 8 (high). This means the accessibility and quality of credit information available in Bulgaria is medium.
This makes it not that easy for you to understand the credit risk of your counterpart in Bulgaria. Unless you have found a good source for credit ratings or know your specific customers well, we suggest charging payment upfront or using credit insurance.
Your juridical rights as a creditor are 8 out of 12 and, therefore, medium.
The low financing risk for creditors also impacts the medium interest rate in the private sector of 4,12%.
Debt Collection in Bulgaria: Frequently Asked Questions (FAQ)
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In Bulgaria, if you're having trouble getting paid by customers, there are companies that offer collection services. The legal collection process takes a long time and can be expensive. It's best to work with a company that gets paid only if they're successful. If you decide to take legal action, the process can take up to a year and a half. Debitura can help you with the debt collection process in Bulgaria, including amicable collection, legal collections, and debt enforcement through the bailiff's court.
In Bulgaria, the debt collection process usually involves three steps: pre-legal collection, legal debt collection, and debt enforcement. Pre-legal collection involves finding a debt collection partner to help you recover the money. Legal debt collection is used for bigger problems and could take up to one and a half years to resolve. Debt enforcement is done through the court system or bailiffs if the debtor has agreed to pay or there is a court order. At Debitura, we offer assistance for all three steps in Bulgaria.
If the debt is disputed, debt collection in Bulgaria requires a civil lawsuit. Legal actions can also involve debt enforcement and insolvency proceedings, which require a local lawyer. Several types of court proceedings exist, including claim, claim security, evidence securing, and warrant proceedings. Private and state bailiffs conduct execution proceedings, and arbitration courts handle claim proceedings. Insolvency proceedings involve selling the debtor's assets to pay off debts. The cost of hiring a lawyer depends on the size and complexity of the case. It is best to compare different lawyers' prices to get the best deal.
The cost of debt collection in Bulgaria varies. Debitura offers a no-cure-no-pay model for pre-legal collection with a success fee between 10-20%. The price for legal actions depends on your case and preferences. Debitura can provide you with 3 quotes from the best debt collection lawyers in Bulgaria.
The duration of debt collection in Bulgaria depends on the debtor and the case. If the case can be resolved in the pre-legal phase, the process typically takes 3-6 months. However, if legal action is required, it can take 12-18 months. The timeline varies based on each situation, but we work diligently to resolve debts as efficiently as possible.
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