The means of obtaining information on a person’s creditworthiness were broadened in 2011 by launching a pending execution proceedings register kept by the Bulgarian Private Bailiffs Chamber.
The need to obtain information on the creditworthiness of a person in Bulgaria arises when one contemplates entering into a commercial transaction having any credit element (eg, loan, leasing, or sale with a deferred price payment) or when one contemplates bringing an action to recover overdue amounts. This article briefly outlines currently available methods for obtaining such information, including latest developments in the area, such as the launching in 2011 of a register of pending execution proceedings kept by the Bulgarian Private Bailiffs Chamber.
Real Estate Registry
The Real Estate Registry shows whether a particular person has any rights over immovable property. The Registry can be accessed online and covers the whole territory of Bulgaria.
A check may be run with the Trade Registry to establish whether a particular person has any participation in the capital of Bulgarian companies, excluding, however, joint-stock companies, since the transfer of shares in a joint-stock company is not subject to registration.
Where the counterparty is a Bulgaria company, it will be possible, via the Trade Registry, to access the company’s last annual accounting report. Inspection of the annual financial reports may provide information on the net value of the company’s assets. Furthermore, the cash flows disclosed in the financial reports may provide a hint whether it is worth obtaining an attachment order over the company’s bank accounts to guarantee future claims. This is important since the availability of an attachment over a bank account with sufficient funds to meet the amount in dispute will be crucial in deciding whether to bring an action at all.
The Trade Registry also provides information about court judgments for commencement of insolvency proceedings. Applications for commencement of such proceedings are subject to registration with the Trade Registry, but only if submitted by the insolvent company (applications filed by third persons are not in the public domain). One may, however, request an insolvency certificate from the district court having jurisdiction at the seat of the company. Such a certificate will indicate all applications for commencement of insolvency proceedings, including the aplications submitted by creditors. The insolvency certificate may be obtained only with the assistance of the company to which it relates.
Central Registry of Special Pledges
One may obtain information about special pledges from the public Central Registry of Special Pledges. A special pledge is a non-possessory security instrument where the pledgor retains possession of the collateral. This form of security is cheap, efficient, and widely used in compractice mercial relations in Bulgaria. The Central Registry of Special Pledges also contains information about leasing agreements and title retention clauses, since these must be registered to ensure their priority vis-à-vis claims secured by special pledges, if any, over the same property items.
Central Credit Registry
There is a Central Credit Registry but only credit and financial institutions provide information to it and are granted access to it.
It is possible in certain cases to obtain valuable information using a bailiff. Upon obtaining an interim protective measure or a special approval from a court, in a case of a pending lawsuit, a claimant may ask a bailiff to check for any:
- rights of the defendant entered into the registries of automobile vehicles kept by the traffic police; and
- social security payments made by the defendant’s employers, in the databases of the National Social Security Institute.
Having obtained such information, the claimant may attach rights over automobiles or salary payment receivables to guarantee satisfaction of the claim.
IP rights registries
Certain industrial property rights, including patents, utility models, trademarks, designs, and geographical indications, are registered in a number of special publicly available registers administered by the Bulgarian Paten Office.
Court books of persons who have filed a claim
Courts keep books available for public inspection where all court actions brought by claimants are registered in alphabetical order by the names of the claimants. Though there is no public electronic means to run a sophisticated search, physical inspection of those books may sometimes be a source of useful information, such as where facts exist whereby one may expect lawsuits to be filed by a particular person.
In addition to the methods listed above, as of 2011 there is a new register providing important information about a person’s financial status. This is the register of pending execution proceedings, kept by the Bulgarian Private Bailiffs Chamber. Due to personal data protection considerations, there is no public access to this register. However, a person may ask a private bailiff for a certificate about pending execution proceedings against that person entered into the register. Banks and other creditors may ask their counterparty for such a certificate when credit transactions are being negotiated. Though this may be a useful source of information, it must be borne in mind that submission of information about execution proceedings by private bailiffs to this register is voluntary. So the certificate may not provide a comprehensive picture of the execution proceedings pending against a particular person.
In addition to the methods listed above, as of 2011 there is a new register providing important information about a person’s financial status. This is the register of pending execution proceedings, kept by the Bulgarian Private Bailiffs Chamber.