10.05.2022

HOW TO COLLECT COUNTER-CLAIMS?

What obligations can be offset? What is the procedure for doing this? Is it possible to intercept everything?

Bulgarian law allows the set-off of counterclaims, but at the same time sets several conditions for this to happen, describes some exceptions, and finally explicitly defines the procedure.

According to Art. 103 of the Law on Obligations and Contracts (LOAC), when two persons owe each other money or homogeneous and substitutable items, each of them, if his claim is due and liquid, may set it off against his obligation. There are several requirements here, without which there can be no set-off at all.

The first is that the two sides must owe each other. Here the law does not distinguish between the grounds on which the obligation arose and its nature. Next, the receivable must be due and liquid. This means that the claim of at least the one who is going to do the set-off must be indisputable. On the other hand, it is liquid in this case that it is feasible, ie what is intercepted is available and can be taken. It should be noted here that sometimes the set-off is used in the sense of compensation, of a kind of enforcement, when a party refuses to fulfill an obligation, and it itself has a claim against the creditor.

There can be an offset only if money or homogeneous and substitutable items are due to each other. It's clear about the money. The interception method is mainly used by them. Homogeneous and substitutable items means that, for example, the same goods are due - wheat, steel, eggs or the like. In any case, however, the set-off under the LOAC is not possible if the due is not substitutable, homogeneous items or money.

The law also stipulates that set-off is allowed even after the receivable has been repaid by prescription, if it could have been made before the expiration of the prescription. That is, all the conditions listed so far at the time of the expiration of the statute of limitations must have been present - to be available, to be indisputable, to be due, to be liquid.

It is important to note that if the debtor has agreed to the transfer of the claim, he cannot set off his debt against his claim against the previous creditor.

Next, the LOAC stipulates that the set-off is made through a statement of one party addressed to the other. This means that the offset, the compensation is not done automatically. It must be requested by at least one of the parties.

The set-off cannot be made on time or on condition. The only exception is if the condition is that the claim brought in court will be respected.

Otherwise, the two counterclaims shall be deemed repaid to the extent of the lesser of them from the day on which the set-off could have taken place.

Another thing to note is that non-enforceable claims, receivables caused by willful misconduct and tax claims cannot be set off without the creditor's consent.

The receivables related to the enforcement are those so-called non-sequesterable things, against which it cannot be enforced by law. They are defined in the Code of Civil Procedure and in an act of the Council of Ministers. There can be no interception here.

There can be no set-off for receivables when they are related to receivables from torts. For example, if there is a recognized disability benefit.

There can be no set-off under the LOAC and in the case of taxes. It should be noted here that set-off is also allowed with them, but this is done by virtue of the legislation related to the collection of state receivables, including the Tax and Social Security Procedure Code.