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The insolvency estate according to Bulgarian insolvency law

The insolvency estate comprises all substantive rights of the insolvency debtor that originated until the opening of the insolvency proceedings as well as those that originated afterwards. If the insolvency proceedings were opened against a sole trader or a partner with unlimited liability, the execution comprises also:

  • His personal assets;
  • The trading company, all personal belongings and rights in rem as well as half of the familiar community of goods.

The insolvency estate does not comprise non-assignable rights.

The insolvency estate serves the satisfaction of all claims and not only of the claims that derive from the business activity. The insolvency proceedings aim to preserve and enlarge the insolvency estate so that more creditors may be satisfied. The following measures must be taken:

  1. The collection of unpaid capital contributions;
  2. Actual and legal security measures;
  3. Invalidity of the familiar community of goods;
  4. Cancellation of contracts that have not been fulfilled. It must be in terms of a continuing obligation. The counterparty is entitled to compensation payment.
  5. The creditor’s right on accounting according to Article 645 of the Commercial Code;
  6. Invalidity of actions and legal transactions that affect the insolvency estate. Article 646 of the Commercial Code prescribes seven possibilities of avoidance. This way, the creditors shall be equalised. Besides there is a so called “period of suspicion” (between the actual occurrence of the insolvency and the opening of the insolvency proceedings). Within this period, all concluded transactions and all payments on the part of the insolvency debtor are ineffective towards the insolvency creditor.
  7. Avoidance according to Article 647 of the Commercial Code. The avoidance concerns the transactions that are enumerated in this legal provision that the insolvency debtor concluded in the legally provided period of suspicion before the opening of the insolvency proceedings. The presumed affection of the insolvency estate must be proved. The respective transactions are retrospectively voidable with the consequence of reverse transaction of what has been performed – Article 648 of the Commercial Code.