Claims of Creditors in Insolvency Proceedings
Claims of creditors arising after the date of the decision to open insolvency proceedings
Pursuant to Article 639 of the Bulgarian Commerce Act (CA), creditors whose claims have arisen after the date of the decision to open insolvency proceedings are paid on the due date. If payment is not received when due, their claims are satisfied in accordance with Article 722(1) CA. Where a creditor has received payment on the due date in this situation, that payment extinguishes the specific obligation that was paid. Since the creditor’s claim has already been satisfied, there is no basis for any further satisfaction, including under the procedure of Article 722(1) of the Civil Procedure Code. This procedure applies only to claims that arose before the date of the decision to open insolvency proceedings and to claims arising after that date which were not paid when due. The rule applies to all claims, irrespective of whether they are public-law claims.
Nor may any creditor use such a payment to extinguish older claims. Those claims should already have been lodged and, where applicable, included in the list of admitted claims; they may be satisfied only within the insolvency proceedings and in accordance with Article 722(1) of the Civil Procedure Code. Claims that were not lodged are extinguished pursuant to Article 739(1) CA. A creditor therefore cannot, at its own discretion, redirect a payment made on behalf of the debtor for a claim arising after the opening of the insolvency proceedings towards another claim that arose before that date, regardless of whether the older claim was lodged or admitted in the same proceedings.
The provisions of Article 169 of the Tax and Social Security Procedure Code (TSSPC) are not applicable in insolvency proceedings. They do not exclude the application of Article 639 CA, because the Commerce Act is the special statute governing insolvency proceedings. Insolvency law is generally complex, and it is advisable to consult a lawyer practising commercial law on such matters. Article 169 TSSPC regulates the order in which public claims are discharged before and after enforcement begins under that Code. It is therefore a special rule only for enforcement under the TSSPC, not for the universal enforcement procedure constituted by insolvency proceedings under the Commerce Act.
This publication does not constitute a legal opinion or advice concerning a specific situation or person, nor does the author claim that it provides an exhaustive account of corporate insolvency. Legal assistance in a similar matter should be sought through consultation with a lawyer practising commercial law and, in particular, insolvency law.
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