On the 3rd of November 2022 the government approved a bill on personal insolvency. The European commission insists on its approval so that Bulgaria could receive financial help from the European Union in accordance with the Recovery and resilience plan for Bulgaria.
Until now individuals in Bulgaria were not given legal opportunity to be declared insolvent, when they could not afford to pay their liabilities. The bill on personal insolvency regulates the terms on how insolvency proceedings are taken.
The bona fide debtors are in an unfavorable position, because their inability to pay their debts is caused by circumstances they could not possibly affect on, such as the loss of their job, or family issues, or health issues, or some kind of financial problems, etc. Until now the bona fide debtors were not provided with any legal defence in such cases. Many creditors often decide to sue their debtors and make them pay their liabilities. Rarely are such problems solved out of court, however, usually debtors do not have enough financial resources to afford legal representation at court, which puts them in an uncomfortable position.
The new bill provides every bona fide debtor with the opportunity to start an insolvency proceeding. Every debtor who takes responsibility for their debts and does not intend to harm their creditor’s interests is considered to be a bona fide debtor.
The bill on personal insolvency guarantees that debtors will be able to lead a normal life. They have the right of maintenance as well as immunity from seizure for a part of their property. According to the new bill, the debtors shall worry less about the expenses they are obliged to make during the insolvency procedure, because they have been minimalized.
The terms and conditions on debt redemption are regulated by the law.