Bulgaria introduces absolute statute of limitations

On 1 December 2020, an amendment to the Bulgarian Obligations and Contracts Act introducing a ten-year absolute statute of limitations governing the expiration of receivables against natural persons was officially published in the State Gazette.

The new rule will go into force on 2 June 2021.

The law states that after a ten-year period monetary receivables towards natural persons will expire, regardless of an interruption. The amendment, however, also anticipates exceptions in the application of the absolute ten-year statute of limitations. Exceptions exist in the following situations:

• When the obligation is deferred or rescheduled;
• For obligations of natural persons acting as sole traders or natural persons who are shareholders in a partnership;
• For obligations arising from unlawful damage or unjust enrichment;
• For maintenance;
• For labour remuneration and compensations under the Labour Code;
• For receivables under privatisation contracts or for restituted property;
• When stopping the statute of limitations (e.g. from the filing a lawsuit while court proceedings are ongoing or while enforcement proceedings are ongoing).

For cases started before application of the absolute statute of limitation, the ten-year term begins when the receivables become due. In cases where execution procedures have already been initiated, the term of the absolute statute of limitation begins from the first execution action.

If an execution case is not initiated, the term starts running from the day of entering into force of the legal act, which recognises the receivable.

For more information on exercising creditors rights, filing of court claims and expiry of receivables in Bulgaria, contact your CMS partner or local CMS expert:

Antonia Kehayova, Senior Associate, CMS Sofia

More information on the introduced ten-year absolute statute of limitation can be found at: Bill on absolute statute of limitations (cms-lawnow.com).