Move against Bulgarian debt collectors ‘linked to elections’

Move against Bulgarian debt collectors ‘linked to elections’


By Clive Leviev-Sawyer of the Sofia Globe

Legislative amendments tabled by a Bulgarian Socialist Party MP to ban private debt collectors from being hired by the state and municipalities and to cut back collectors’ charges are linked to forthcoming elections, the head of Bulgaria’s chamber of private enforcement agents said on April 1 2014.

The amendments have been tabled by Strahil Angelov, a controversial MP who hit the headlines earlier in 2014 by visiting Syria and, it was alleged, endorsing the Assad regime – a charge he denies.

Angelov has confirmed to local media that he had been faced with debt collection on a bank loan after the bank unilaterally raised the interest without telling him, sending the amount owing soaring.

His move against debt collectors follows recent hastily-approved legislation by the current ruling axis to cap interest rates on “quick loans” by non-banking lenders, a step expected to have no more than limited effects and also seen by critics as an attempted crowd-pleaser ahead of May 2014 European Parliament elections.

Angelov not only wants to limit the powers of debt collectors, but also intends to table amendments to the Civil Procedure Code to abolish the right of banks to use a fast-track procedure to get a foreclosure order.

Speaking on April 1 to local television station bTV, private enforcement agents chamber head Georgi Dichev said that the activities of debt collectors always returned to the political agenda whenever elections were on the way.

“Last year a ceiling was put on two charges, and now this,” Dichev said.

Dichev said that Angelov’s amendments would not solve existing problems but instead would create new ones.

Debt collectors worked according to tariffs set in statute and which had not increased, Dichev said.

He said that the sum owed by a debtor grew because of interest and penalties, not because of the actions of debt collectors. Contracts were there to be read, he said.

“With the proposed changes, debts will exceed revenue and will go bad, and debt collectors will not collect them because they will be bankrupt.”

The changes would result in creditors hiring people who would collect debts through extortion, he said.

Dichev said that creditors who wanted to get money owed to them went to court to get a writ of execution, paying court fees – which increased the debt – as well as lawyers’ fees, and only at that stage did debt collectors begin to act.

Every case had two sides, he said: “Many lenders also face bankruptcy if they do not collect the money owed to them”.