New Law on Amendments to the Emergency Act in Bulgaria
New Law on Amendments to the Emergency Act in Bulgaria
Author: Damian Simeonov, Boyanov & Co.
On 9 April 2020 a Law on Amendments to the Emergency Act in Bulgaria was published in the State Gazette. Art. 6 was amended to read as follows:
„Until the revocation of the emergency status in the case of a delay of payment by private persons – debtors under loan agreements or agreements for other forms of financings (factoring, forfeiting, etc.) provided by banks and financial institutions under Art. 3 of the Credit Institutions Act, including when the receivables have been acquired by other banks, financial institutions or third parties, as well as under lease agreements – no interest for delay or penalties shall accrue, the obligation cannot be accelerated and the contract cannot be cancelled due to breach thereof, and no assets can be appropriated.“
With the above amendment to Art. 6 of the Emergency Act, the payment moratorium was limited to financings provided by financial institutions. The payment moratorium applies only during the emergency status in Bulgaria.
At the same time the Association of Banks in Bulgaria, in response to the call by the Bulgarian National Bank, has proposed a non-legislative (voluntary) bank loans payment moratorium for six months. This proposal is not yet approved by the Bulgarian National Bank or made public. However, the question of how a non-legislative moratorium would co-exist with a legislative one and whether the latter would not overrule the former remains.
Author: Damian Simeonov, Boyanov & Co.
On 9 April 2020 a Law on Amendments to the Emergency Act in Bulgaria was published in the State Gazette. Art. 6 was amended to read as follows:
„Until the revocation of the emergency status in the case of a delay of payment by private persons – debtors under loan agreements or agreements for other forms of financings (factoring, forfeiting, etc.) provided by banks and financial institutions under Art. 3 of the Credit Institutions Act, including when the receivables have been acquired by other banks, financial institutions or third parties, as well as under lease agreements – no interest for delay or penalties shall accrue, the obligation cannot be accelerated and the contract cannot be cancelled due to breach thereof, and no assets can be appropriated.“
With the above amendment to Art. 6 of the Emergency Act, the payment moratorium was limited to financings provided by financial institutions. The payment moratorium applies only during the emergency status in Bulgaria.
At the same time the Association of Banks in Bulgaria, in response to the call by the Bulgarian National Bank, has proposed a non-legislative (voluntary) bank loans payment moratorium for six months. This proposal is not yet approved by the Bulgarian National Bank or made public. However, the question of how a non-legislative moratorium would co-exist with a legislative one and whether the latter would not overrule the former remains.
