HOW TO COLLECT RECEIVABLES DUE FROM ABROAD
A number of Bulgarian state owned and private companies and financial institutions, which have been and still are active at the international market, have a number of unsettled accounts with foreign debtors. That additionally reduces the availability of free funds and should be regarded as a threat leading to insolvency. Practice has proved that a considerable part of the managers of these companies are not aware of the existing possibilities for collecting the amounts due.
This problem can be settled in two ways - either by selling the receivable, or by using specialised legal services. Factoring is based on buying the receivable of an enterprise by a company specialised in this area (factor), at a price lower than the real one, as it undertake the risk of collecting the amount due. In case the receivable cannot be sold at a profitable price, lawyers should be authorised, who will undertake the collection against a respective commission, representing a percentage of the amount due. They have not the right to buy the receivable, but act as intermidiaries, as they are persons highly specialised in a respective legal sphere, who are authorised to represent the parties and sign mutually beneficial contracts with the parties.
Since 1991 a representative office of Coeler Legal Consulting firm has been successfully operated in Bulgaria in this area. The company was established more than 50 years ago in Hamburg and is specialised in international private law. Frank Schmitz, Doctor of Law and Member of the Bulgarian-Aryan Attorney Association is the person responsible for Bulgaria and Eastern Europe.
Borislav Chonkov, who works in the headoffice of the firm in Germany presented specially for the Banker weekly nespaper the expectations and the problems the company faces operating in Bulgaria. There is no other legal firm in Bulgaria operating in the field of international private law, which is so popular at the Arbitration Court in Zurich and at the International Chamber in Paris. We are members of Eurolink, and this is an association of more than 2000 European lawyers and legal firms. The Board of Directors consists of nine members and we also have a representative in it, announced Borislav Chonkov. In Bulgaria the legal firm has undertaken the overall legal servicing of foreign investors and is developing legal analyses in the field of concessions. Coeler Legal Consulting acted as Soran International legal advisors at the negotiations for Sofia Water concessioning. The firm applies per hour payment for it services when it studies the client's needs, evaluates the chances for collecting the receivables and then the client should make the choice whether to authorise the lawyers against the respective compensation. Legal fees in Europe are rather high. That's why persons who have receivables due or have to take part in court procedures outside Bulgaria, are offered services of companies who will undertake the financing of these expenses. In Germany, Belgium, Holland and Italy for example, the state fees for receivables upto DEM100,000 amount to DEM3000. The lawyer's fee for sums of DEM100,000 is DEM4,000. When the amount due is DEM500,000, the state fee is equal to DEM11,000, while the lawyer's fee is DEM9,000. All these amounts are for the first instance and they double for every higher authority. Obviously, we are speaking of funds, which considerable part of firms cannot afford themselves and they are undertaken by the financing company. Coeler Legal Consulting work with Forest and DIS, which deal with such cases. According to the law, highest fees for Germany and almost all Europe is 35% of the receivable.