The caretaker government had proposed a law on non-performing loans

On May 12th last year, the Council of Ministers submitted a draft law on credit servicers and credit purchasers to the Parliament, as reported by the Ministry of Finance on February 12. Earlier today, it became clear that the European Commission has initiated an infringement procedure against seven countries, including Bulgaria, for the delayed transposition of the directive on non-performing loans.

• EC takes Bulgaria to court for failing to transpose the Directive on Non-Performing Loans

Once the Parliament adopts the draft law, the procedure will be dismissed, explained the Ministry of Finance. The new law aims to address issues related to high levels of non-performing loans. It provides for the development of a secondary market for the sale of debt. It also creates better conditions for the cross-border transfer of non-performing loan receivables, as well as ensuring high levels of protection for borrowers.

Currently, there is no legislation in Bulgaria regulating the sale of receivables. The new law will resolve this issue. The concept of a "credit purchaser" is introduced, along with the requirements for such firms. At present, any business entity can collect people's debts. This will no longer be the case once the texts are adopted and the directive is transposed.