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FAQ
¤ What is private enforcement? The Private Enforcement Agents Act was adopted in 2005 and the first 14 offices in the country (ours among them) started to operate in April 2006. The private enforcement agent is a person who is assigned enforced collection of private and public receivables. He is independent and the performance of his functions is governed solely by the law. The private enforcement agent is not a trader or a debt collection company; he is an official performing delegated state powers in the manner and methods indicated in the Law. This is why the Criminal Code equalizes violations against him with violations against a judge or a public prosecutor, i.e. they are punished by the maximum severity of the law. The enforcement agent proceeds to execution at the request of the interested party on the grounds of a presented writ of execution or another act subject to enforcement. ¤ What is necessary for the beginning of enforcement proceedings? When citizens and companies dispose of a writ of execution or another act subject to enforcement execution they may address a private enforcement agent. Each private enforcement agent has a territory of activity – this is the territory on which he is authorized to perform enforcement. The region corresponds to the region of the relevant district court; for Sofia it is Sofia City Court. ¤ What is a writ of execution? The writ of execution is a judicial act certifying that the person in favor of whom it is issued is entitled to enforced execution for the purpose of settling his claim against a debtor /for delivery of property, payment of money, destruction of an illegal building, etc./ and obliges the enforcement agent to initiate enforcement proceedings in order to achieve that right. ¤ What are the methods of receiving a writ of execution? Supplying with a writ of execution becomes possible in two manners – on the grounds of an initiated claim (a lawsuit through the courts) or through the ordinance proceedings (a form of fast acquisition of a writ of execution where the debtor does not take part in the proceedings). In the first case the writ of execution is issued by the court on the grounds of effective judgments and court resolutions, the reprehensible judgments of the court of appeal, minutes of judicial agreement, judgment of arbitrage courts as well as resolutions of foreign courts the execution of which has been permitted by the Bulgarian court. The ordinance proceedings are of two types – when the creditor disposes of documents evidencing his receivable against the debtor – these are documents and bank statements ascertaining receivables of the banks, state institutions and municipalities; notary deeds; agreements and other notarized contracts; securities such as promissory notes or bill of exchange. He may fill in the form of the enforcement order and enclose to it some of the above documents and submit it to the regional court according to the debtor’s domicile or his permanent address if he is a natural person and may request immediate execution. In this case the court issues an ordinance and a writ of execution immediately. When the creditor does not dispose of any of the above documents he again fills in an application for issuing of anenforcement order and submits it to the court. However a writ of execution is issued if the debtor does not file an objection within two weeks as of the handing of the ordinance. ¤ What fees do you need to pay in order to collect your receivables through a private enforcement agent? Who pays these fees? The private enforcement agent collects fees for all enforcement proceedings the amount of which is determined by the Council of Ministers in a Tariff of fees and costs, as mandated by the PEAA. The fees of the private enforcement agent are equal in amount to the fees envisaged in Tariff No. 1 to the Act on state fees, fees collected by courts, etc., which are complied with by the state enforcement agents. The fees and costs are payable by the creditor in advance – upon initiation of the enforcement proceedings and prior to performance of the relevant enforcement collection. The fees are payable by the creditor but are at the debtor’s account. Besides these, the debtor owes the private enforcement agent the so-called proportional fees which are formed in proportion to the amount of the debt. It should be taken into consideration that as of 1 January 2011 the Private Enforcement Agent Act and the Civil Procedure Code have been amended and in accordance to this amendment the creditor and afterwards the debtor are obliged to pay the relevant state and local fees for each separate reference for the debtor and for imposition/lifting of security measures such as lien and distraint. The Chamber of PEA raised objections against these amendments of the law but eventually the Ministry of Justice succeded in introducing them through the National Assembly. ¤ Can you be convicted without being informed? Yes. The legislation gives the opportunity for the creditor to acquire a writ of execution without the participation of the debtor in this process under the order of the ordinance proceedings (see question No. 4). A writ of execution is issued at the written request of the plaintiff and a transcript of the latter is not served to the debtor. So, if you have drawn a bank loan and have failed to serve it then it becomes executable in advance and the bank may request issuing of an order for immediate execution only on the grounds of the excerpt from the ledgers. In this case you become aware that you have been convicted when the case is delivered to an enforcement agent. Furthermore, in accordance with Article 50 of the Civil Procedure Code serving of all communications and summons about legal proceedings including enforced collection towards traders and legal entities entered into the relevant register is performed at the latest address indicated in the register. If the person has left that address without entering into the register the new address all communications are enclosed to the proceedings and are considered duly served. This is the reason for a number of judgments and ordinances for execution to become effective without the knowledge of the debtor. ¤ Is rescheduling of a debt allowed? A debtor owes the entire amount together with the interest, costs, fees and expenses pertaining to the enforced collection. The time limit for voluntary execution is two weeks as of receipt of the invitation for voluntary execution. However, Article 454, Par. 1 of the Civil Procedure Code entitles the natural persons to make use of their right to deposit the amount due as follows: 30% of the amount of the debt, followed by 10% of the liability payable every month until its settlement. During that period of time the private enforcement agent pauses the enforced collection. This rescheduling is not valid for legal entities as well as in the cases when the enforcement is directed towards chattels pledged or mortgaged in favor of the creditor. ¤ What are the debtor’s rights and obligations? Rights
¤ What does joint liability of a guarantor mean and what are the guarantor’s rights?
The guarantor is jointly liable with the main debtor, i.e. he assumes responsibility before the creditor of another person for the settlement of the other person’s debt. The guarantor is equally responsible with the main debtor, i.e. he may not ask the creditor to seek enforcement from the main debtor first or division of the debt.
A guarantor who has settled another person’s debt may become a creditor and request payment of the amounts paid by the latter from the debtor and the co-guarantors. The guarantor may request from the debtor the principal, interest on the main debt and the costs and expenses pertaining to the enforcement case. Besides, the guarantor is entitled to the lawful interest on all paid amounts as of the date of payment. ¤ Why is my bank account/remuneration garnished before I have received an invitation for voluntary execution? The law (Art. 507 of the Civil Procedure Code) not only allows but obliges the enforcement agent to send a notice of levy together with the invitation for voluntary execution to any third party from which the debtor has receivables. The purpose of the law-maker is obvious – the debtor should be prevented from drawing the sums from their accounts or to dispose with their receivable. ¤ What is the procedure for participation in a public sale of immovable property? 1. All properties declared for sale are announced in the places indicated in the Civil Procedure Code and in the register of the Chamber of private enforcement agents - http://www.sales.bcpea.org/. The announcements for sale describe the specifications of the property, its location and initial bid price. It is calculated as 75% of the property value. 2. Within one month as of the date of publishing the announcement for sale all candidates may obtain additional information about the property. The announcement of the private enforcement agent indicates the time during which views of the property can be made. 3. Within one month as of the date of publishing of the announcement each applicant must submit his offer to the relevant regional court – for Sofia the bids are submitted to the secretary’s office of Sofia City Court at 54, Tsar Boris III Blvd. The proposed bid must be written both in words and in figures. The applicant must make an advance deposit which is 10% of the initial price. 4. On the first working day after the expiration of the one-month’s term for collection of bids the private enforcement agent draws up a written statement and must announce the buyer of the property in the presence of all persons who have submitted bids. That is the person who has submitted the highest price above the initial one. Prior to the announcement the private enforcement agent has to ask if somebody offers for the property a price which exceeds the highest bid by the amount of the earnest; if there is such a bid then he asks if there is another bidder offering a higher price exceeding the previous one by the amount of the earnest and so on, until the exhaustion of the oral bidding. 5. In case there are no bidders appearing at the auction the private enforcement agent announces another bid, this time at a price lower by 20% than the initial price. ¤ What is the time limit for payment of the remaining amount? Within one week as of completion of the bid (i.e. inclusive of the date of announcement of the bids) the remaining amount of the price should be paid (after deduction of the earnest deposited to the enforcement agent’s bank account indicated in the announcement). ¤ What fees and costs does the public sale of a property incur? After you have been declared buyer of a property from a public sale you need to pay additionally: - 1,5 % of the price at which you have been declared buyer – to the enforcement agent’s account. This is a fee for execution of an assignment decree inclusive of VAT, but not exceeding 3 600 BGN including VAT; - 2,5 % of the price at which you have been declared buyer – this amount represents the local tax under the Local Taxes and Fees Act payable at the municipality for the acquisition of the property. This rate may vary in the different municipalities according to the location of the purchased property and you should consult the relevant municipality for the exact amount of that fee. - 0.1% of the price – a fee for the Registration Agency for the entry of the assignment decree; In case the debtor fails to deliver voluntarily the possession of the property you are entitled to request from the enforcement agent, on the grounds of an effective and registered assignment decree, the accession to the estate for which a fee is due at the amount of 1% of the price at which you have been declared buyer plus VAT. ¤ Within what time limit you will be refunded with the earnest in case you have not won the bid? The amendments of the Civil Procedure Code effective as of 1 January 2011 envisage the earnest to be refunded on the grounds of a written application of the bidder to the private enforcement agent indicating the bidder’s account AFTER announcement of the bidder and deposition of the offered price. |
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