EU Regulation introduces new procedure for facilitation of debt recovery as of 18 January 2017
As of 18 January 2017 creditors residing in one EU Member-State, who have debtors with bank accounts in another, will have access to another legal instrument for debt recovery due to a new European Account Preservation Order introduced with Regulation (EU) No 655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters.
The Regulation provides for a procedure for freezing debtor’s bank accounts applicable to cross-border cases. For example, when a German creditor files a claim against a debtor with a German court, a European Account Preservation Order can be obtained to allow the creditor to freeze the bank accounts, which the said debtor holds in Bulgaria. Furthermore, it can be requested at any time during the court proceedings.
With the view to prepare the application of the Regulation, the Bulgarian Ministry of Justice had drafted a Bill for amendment of the Code of civil Procedure, which was announced for its mandatory public discussion in August. According to the said amendment, a new chapter 56a is to be added to the Code of Civil Procedure to set out the details for application of the procedure envisaged in the Regulation. The European Account Preservation Order will be issued by the court of first instance in charge of reviewing the disputed debt case, while the execution (including notification of the bank and service to the debtor) will be done by an enforcement agent (съдебен изпълнител) chosen by the creditor. Currently, the Bill is expected to be filed for review and approval by the Bulgarian Parliament before the end of the year.