When the consumer credit is accelerated?

If you are a party to a consumer loan and overdue payment of one or more installments, the bank has the right to declare the entire loan due and to request an order for immediate enforcement by the court.

What is needed to accelerate the entire loan obligation?

To make the loan due before the set term according to the practice of the Supreme Court of Cassation ("SCC"), the bank must serve the debtor with a written document stating clearly, precisely, and unequivocally that due to non-payment of one or more installments of the loan, the bank accelerates the whole unpaid obligation under the contract.

Sending an invitation to the debtor that he has overdue one or more installments and is given a deadline to pay, stating that otherwise the bank will declare the entire obligation under the loan agreement due early and will proceed to enforcement for its collection, is not accepted by the court as a statement that makes the entire loan due before the term set.

What is the understanding of the Bulgarian court?

According to the SCC, the use of the future tense as a verb form means that some actions will be taken after the moment of speaking and it is announced what actions will be performed. However, the use of the phrase "otherwise your entire obligation under the above loan agreement to the bank will be declared due immediately" creates doubt about the date of occurrence of the acceleration of the loan. 

Therefore, only communication from the bank to the debtor stating clearly, explicitly, and unequivocally that the entire unpaid obligation is declared due immediately under the credit agreement produces those legal effects.

What actions do not make the loan due immediately?

The submission of an application under Article 417 of the Civil Procedure Code to the court for issuing an order for immediate foreclosure, as well as the service of the order on the debtor, do not have the character of a notification by the bank to the borrower that the loan is due immediately, since the application is not served on the debtor and the enforcement order does not proceed from the creditor.

At the same time, the service on the borrower of a statement of claim for payment of the remaining outstanding part of the loan may constitute such notification.

This article is purely informative in nature and does not constitute legal advice regarding a specific subject or factual situation. For specific legal advice, you should contact a lawyer. Stoeva, Tchompalov & Znepolski Law Firm is not responsible for taking any legal action based on its content.