The order-for-payment procedure is an effective and less costly way for creditors to collect debts from debtors, without having to conduct lengthy court proceedings. Within this procedure, the court checks only whether the procedure has been formally complied with. There is no exchange of documents between the parties, no hearings are held, no evidence is gathered, and no experts or witnesses are heard. Where the creditor's requirements are met, the court sends the court documents to the debtor and, if no objection is filed, issues an order for enforcement, which may be enforced by an enforcement agent.

The creditor may claim not only the principal, but also penalties and interest by way of the order-for-payment procedure.

Advantages of the Order-for-Payment Procedure

The main advantages of the order-for-payment procedure include its speed and lower court costs. The state fee for the creditor is 2% of the value of the debt, which is half as much as the court fees in actions brought by way of a claim.

Order for Enforcement under Article 410 of the Civil Procedure Code

The creditor may request the issuance of an order for enforcement under Article 410 of the Civil Procedure Code for obligations of up to BGN 25,000. This type of order is most often issued for debts of natural persons who have granted a monetary loan, providers of utility services, mobile operators, debt-collection companies, leasing houses, banks and others. A landlord may also use this procedure to collect unpaid rent and utility charges.

The court checks whether the application meets the statutory requirements, without concerning itself with whether the obligation actually exists. If the debtor does not object, the court issues a writ of execution for the enforced collection of the debt.

Protection of the Debtor

Within a one-month period after receiving a copy of the order for enforcement, the debtor may pay the debt voluntarily. If there is no dispute as to the existence of the obligation, voluntary payment is advisable in order to avoid additional court costs.

If the debtor wishes to contest the obligation, they may authorise an attorney to file an objection against the order within the same one-month period. It is not necessary to state grounds for the challenge; it is sufficient to declare that the obligation is not owed. For example, if the debt arose more than five years ago (or three years in the case of periodic payments), one may invoke the expiry of the limitation period.

Upon the filing of the objection, the court stays the proceedings. The creditor must bring a claim to prove the existence of the debt, presenting the necessary evidence. This claim is conducted by way of the general procedure, and the creditor must pay a further 2% of the amount of the debt for bringing the claim under Article 422 of the Civil Procedure Code.

Order for Immediate Enforcement under Article 417 of the Civil Procedure Code

The legislator provides for a special and expedited way of collecting receivables through the order-for-payment procedure under Article 417 of the Civil Procedure Code, which is applicable in certain cases. By this method, the creditor may collect a debt regardless of its amount, but must present specific documents.

In order to obtain an order for immediate enforcement under Article 417 of the Civil Procedure Code, the creditor must attach one of the following documents to their application:

  • An act of an administrative authority in respect of which the admission of enforcement has been assigned to the civil courts.
  • A document or an extract from accounting books establishing receivables of state institutions and municipalities, or an extract from the accounting books of a bank together with the documents from which the bank's receivable arises and all its annexes, including the applicable general terms and conditions.
  • A notarial deed, a settlement or another contract with notarisation of the signatures, containing obligations to pay sums of money or other fungible things, as well as obligations to hand over specified things.
  • An extract from the register of special pledges for a registered security and for the commencement of enforcement – concerning the handing over of pledged things.
  • An extract from the register of special pledges for a registered contract of sale with retention of title until the price is paid, or a leasing contract – concerning the return of things sold or leased.
  • A pledge agreement or a mortgage deed.
  • An effective instrument establishing a private state or municipal receivable.
  • Effective mandatory prescriptions of the authorities of the Executive Agency "General Labour Inspectorate" to an employer for the payment of monetary obligations under employment relationships that have been delayed by more than two months.
  • An audit charge act (акт за начет).
  • A promissory note, a bill of exchange or another order security treated as equivalent to them, as well as a bond or coupons thereon. Where the security secures a receivable arising from a contract concluded with a consumer, the contract must also be attached to the application, if it is in written form, together with all its annexes, including the applicable general terms and conditions.

In these cases, in addition to issuing the order for enforcement, the court also orders provisional enforcement by issuing a writ of execution. The debtor receives the order together with an invitation for voluntary performance from an enforcement agent.

How the Debtor Can Protect Themselves

The debtor has the right to object against the order for immediate enforcement, but this will not stay the proceedings. Enforcement may be stayed only where the order has been issued on the basis of a promissory note. In addition, the debtor may file an interlocutory appeal against the admitted provisional enforcement, in order to protect their property during the claim proceedings. The appeal must be filed within one month of the service of the order.

If you are a creditor to whom sums of money are owed, or a debtor against whom an order for enforcement has been issued, you may turn to us for the protection of your interests on telephone 0887550706 or by e-mail: [email protected]