Lodging a claim in Bulgarian insolvency proceedings and avoidance actions: deadlines and creditors' rights

Iva Petkova, attorney · Published 2 November 2026 · 6 min

When a debtor becomes insolvent in Bulgaria, creditors receive only what they lodge in time and manage to defend. The deadlines are short, and the greatest value often lies in the transactions by which the debtor moved assets out beforehand. We explain what a creditor must do and where most is won or lost.

How we can help

Bulgarian insolvency proceedings bring all creditors into one case and distribute the debtor's assets in a strict order. A creditor who misses a deadline risks receiving nothing, while one who takes an active part can increase the pool from which creditors are paid by challenging transactions that moved assets out. Insolvency is therefore not an accounting formality but a moment for quick and well-prepared action.

Who can apply to open proceedings

Insolvency proceedings are opened on a written petition by the debtor or its liquidator, by a creditor under a commercial transaction, by the National Revenue Agency for certain public debts, or by the Labour Inspectorate where wages to at least a third of the employees are more than two months overdue (Art. 625 of the Commerce Act). For a creditor, a petition is a strong tool: it often makes the debtor pay or offer a settlement, but it requires a careful assessment of the evidence of insolvency.

Lodging the claim

Creditors lodge their claims in writing with the insolvency court within one month of the entry of the opening decision in the Commercial Register (Art. 685(1)). The application is on a standard form, sets out the facts on which the claim is based, its priority and security, and a bank account for payments, and all written evidence is attached (Art. 685(2) to (4)). Security or priority left out of the application can move a creditor several ranks down in the distribution.

Lodging the claim interrupts limitation, which then does not run while the proceedings last (Art. 685a). A claim lodged after the one-month period but within two months of its expiry is still accepted, but the creditor cannot contest claims already accepted and is paid from what remains if a distribution has already been made; after that period, claims arising before the opening can no longer be lodged (Art. 688(1) and (2)).

A creditor from another EU country takes part on the same deadlines. Cross-border proceedings are governed by Regulation (EU) 2015/848 on insolvency proceedings, and the standard forms are set by Implementing Regulation (EU) 2017/1105.

The trustee's lists and objections

Within 14 days after the lodging period ends, the trustee draws up lists of accepted and rejected claims (Art. 686(1)). The debtor or any creditor may file a written objection with the court, copied to the trustee, against an accepted or rejected claim within 7 days of publication of the lists; the objection may concern the basis, amount, security or priority (Art. 690). The court rules by an order that cannot be appealed (Art. 692).

If the objection fails, a claim for a declaration remains: a creditor whose claim was rejected may seek a declaration that it exists, and a creditor may challenge another creditor's accepted claim. The claim is brought before the insolvency court within 14 days of publication of the court's order in the Commercial Register; the fee is on a quarter of the claim and is not paid in advance, and a reserve is set aside for the disputed claim in the distribution (Art. 694). Challenging sham claims of parties related to the debtor is often the most effective way to increase genuine creditors' share.

The order of payment

The proceeds are distributed in a statutory order (Art. 722(1)). First come claims secured by pledge, mortgage, attachment or charge, from the proceeds of that security; then claims with a right of retention, insolvency costs, employees' claims, maintenance, public claims of the state and municipalities, claims arising after the opening, and only then the remaining unsecured claims. Where money is not enough for a rank, it is shared among that rank's creditors pro rata (Art. 722(2)). For an unsecured trade creditor, therefore, the rank and the size of the estate decide how much he receives.

Avoidance actions: recovering assets moved out

The greatest value for creditors often lies in transactions made before the insolvency. The trustee or, if he does nothing, any creditor may bring claims under Articles 645, 646 and 647 of the Commerce Act and Article 135 of the Obligations and Contracts Act within two years of the opening, together with claims to return the assets to the estate (Art. 649(1) and (2)). They are heard by the insolvency court, and the judgment binds the debtor, the trustee and all creditors (Art. 649(5)). The court fee is on a quarter of the value of the claim and is not paid in advance (Art. 649(6)).

For each type of transaction the law sets a look-back period, counted from the filing of the insolvency petition:

• paying a debt not yet due, or new security for an old debt, in the last year, and paying a due debt in the last 6 months, after the start date of insolvency; the periods are two years and one year if the creditor knew of the insolvency, which is presumed for related parties (Art. 646(2) to (4));
• gifts in the last two years, and with related parties in the last three years (Art. 647(1)(1) and (2));
• transactions where what was given significantly exceeds what was received, in the last two years, and security for others' debts in the last year, but not before the start date of insolvency, or two years where the creditor is a related party (Art. 647(1)(3) to (5));
• transactions with related parties that harm creditors in the last two years (Art. 647(1)(6));
• set-offs made with knowledge of the insolvency or in the last year before the petition (Art. 645(3) and (4)).

These claims require analysis of the debtor's accounts, related-party transactions and the date from which the debtor was insolvent. Creditors with information about transfers of property, receivables or the business should provide it at once, because the two-year period runs from the opening.

Where a lawyer changes the outcome

• in the first month, when the claim must be lodged with the right basis, priority and security;
• in the 7 days for objections to the lists, when sham or inflated claims of other creditors are challenged;
• in avoidance actions, where assets are brought back into the estate and the amounts often exceed the claim itself;
• at the creditors' meeting and committee, where the sale of assets and any restructuring plan are decided;
• for a foreign creditor who must meet Bulgarian deadlines without knowing the procedure.

Petkova & Minkov Law Firm represents creditors and debtors in insolvency proceedings and related claims. We work in Bulgarian, English, Russian and German.

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