Priority of claims in enforcement proceedings

Under Article 460 of the Bulgarian Code of Civil Procedure, if the amount recovered in enforcement proceedings is insufficient to satisfy all enforcement creditors, the enforcement officer draws up a distribution. The officer first sets aside sums to pay claims entitled to priority under Article 136 of the Obligations and Contracts Act, then distributes the balance proportionately among the remaining claims.

The priority under Article 136(1), item 1, of the Act applies to claims for the costs of securing a claim and of compulsory enforcement, and for the costs of actions under Articles 134 and 135. It applies to the proceeds of the property in respect of which those costs were incurred, as against creditors who benefit from the expenditure.

Point 6 of Interpretative Decision No. 2 of 26 June 2015 in interpretative case No. 2/2013 of the General Assembly of the Civil and Commercial Chambers of the Supreme Court of Cassation gives binding guidance on this provision. The first rank of special priorities includes the original enforcement creditor’s costs of pursuing the enforcement measure that generated the proceeds being distributed. It also includes that creditor’s costs of initiating the proceedings and the fees of one lawyer if no other enforcement measures were requested or if the distribution concerns proceeds from the debtor’s most valuable asset or largest receivable. No costs of creditors who subsequently joined enjoy this priority, except costs of actions under Articles 134 and 135 of the Obligations and Contracts Act.

If you have questions about enforcement proceedings or the distribution of sums recovered, consult a lawyer.