Covid-19 and Loan Moratorium in Bulgaria: Don’t Pay off Your Loans with New Ones

We are increasingly moving closer to lifting the moratorium on all term loans granted as pandemic relief. What will happen to people who have lost their jobs but owe money to banks - this will become clear at the end of March.

According to BNB data, more than 100 thousand are the requests for deferral of debts submitted by households to the banks, with more than BGN 82,000 approved and the total worth of the liabilities approved for a private moratorium being over BGN 1.8 billion.

Private bailiffs' law firms did not close during the pandemic. "What exactly will happen after the loan moratorium is lifted is difficult to predict," Ivan Hadzhiivanov, Vice-President of the Council of the Chamber of Private Bailiffs, said during the "Before All" talk show: 

"Before the state of emergency was imposed the Chamber came up with a proposal to limit enforcement actions against debtors in order to make it easier to survive the pandemic, then the State of Emergency Act limited the opening of new enforcement cases, the imposition of foreclosures, inventories, public sales, which in turn led to a drop in the revenues of private bailiffs for 2020 paid to the state budget and creditors.

After the end of the state of emergency, thе situation changed, banks no longer can afford un-serviced loans after the state of emergency is lifted", added Hadzhivanov.

"People who have failed to pull themselves together and improve their financial discipline will have to pay their loans. We suggested that before enforcement actions are taken there should be an opportunity for debtors to sell property freely through private bailiff firms, because it will be much cheaper and faster than launching enforcement actions," the expert said.

According to him, many...