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.
Insolvency Proceedings
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.
Restructuring
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.
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.
Priority of Claims
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.
We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.
Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.
Essential Website Cookies
These cookies are strictly necessary to provide you with services available through our website and to use some of its features.
Because these cookies are strictly necessary to deliver the website, you cannot refuse them without impacting how our site functions. You can block or delete them by changing your browser settings and force blocking all cookies on this website.
Other external services
We also use different external services like Google Webfonts, Google Maps and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.