Insolvency procedures Bulgaria
In the volatile world of business, financial hardships can emerge unpredictably concerning insolvency procedure Bulgaria.
Navigating through insolvency procedures can be a complex and overwhelming task, especially in a foreign jurisdiction like Bulgaria.
This article aims to provide a comprehensive understanding of Bulgarian insolvency procedures, highlighting the legal language and procedures involved.
Insolvency in Bulgaria is defined under the Bulgarian Commerce Act.
This act provides the legal framework for insolvency procedures for any business entity that is unable to meet its financial obligations.
The insolvency process begins with a formal declaration of insolvency, which can be initiated either by the debtor or the creditors.
Declaration of Insolvency
The debtor, whether a sole proprietor or a limited liability company, may file a petition for insolvency if they are unable to fulfill their financial obligations.
Every creditor can also file a petition for the debtor’s insolvency if the debtor has defaulted on their payments.
Once the insolvency petition is accepted, the court appoints an insolvency administrator, who assumes control over the debtor’s assets and business operations.
The administrator’s primary role is to facilitate the repayment of debts by selling off the debtor’s assets.
The legal acts and praxis offers two primary Insolvency procedures Bulgaria: restructuring and liquidation.
In a restructuring procedure, the debtor’s financial situation is assessed, and a recovery plan is proposed by the insolvency administrator.
The plan requires approval from both the creditors and the court.
When the plan has been approved, the debtor maintains control of their business under the supervision of the insolvency administrator.
A liquidation procedure involves the sale of all the debtor’s assets to repay the creditors.
In a liquidation procedure, the insolvency administrator plays a more active role, managing the liquidation process and distributing the proceeds to the creditors.
The Bulgarian Commerce Act also provides a specific order for the repayment of debts.
Secured creditors are usually paid first, followed by employees’ wages, taxes, and unsecured creditors.
Our services in Insolvency procedures Bulgaria
Insolvency procedures in Bulgaria are a complicated legal process that requires detailed understanding and professional handling.
It is advisable to seek guidance from knowledgeable Bulgarian insolvency lawyers to navigate these procedures effectively.
Despite the complexities, the insolvency procedures in Bulgaria are designed to ensure a fair outcome for all parties involved, aiming to balance the rights and interests of debtors and creditors alike.
This article serves as a basic guide and does not substitute for legal advice. Please consult with a legal professional for advice tailored to your circumstances.