Банкеръ Weekly

Briefs

PRIVATE BAILIFFS TO START OPERATIONS

Commercial banks and other large creditors in Bulgaria may set their minds at ease now when it comes to collection of their receivables from irregular debtors, because the country already has its Chamber of Private Bailiffs. The establishment of the chamber on November 26 marked the beginning of operations of the Private Bailiffs Act, adopted last spring.
The act provides that the compulsory collection of cash receivables be carried out by both state and private agents. The establishment of the branch organisation involved 95 of a total of 255 acting state bailiffs. That was the number of applicants who filed documents this autumn declaring they wanted to go out on the free market and take part in the terms of real competition. On November 25, the Minister of Justice handed in the authorizations of the private bailiffs and gave them the right to participate in the founders meeting.
Despite the actual establishment of the branch organisation, the new bailiffs will be able to offer their services no sooner than next spring. Until then, they will have to equip their offices and the Ministry of Justice will write and adopt several regulations on their activities.
It is still hard to predict whether or not the new model of collecting receivables will prove efficient. As it is known, during the parliamentary adoption of the Private Bailiffs Act serious political and legal contradictions exploded. The guild of the bailiffs was broken by controversies, too, while magistrates debated on which was better for the profession - the privatisation of the execution or the maintenance of the status quo.
Ivan Cholakov, bailiff from the Sofia District Court who chose to start his own business, commented for the BANKER weekly that private execution existed in almost all EU member states. In the Netherlands, for example, which served as a model for the reform in Bulgaria, private execution has an almost 200-year tradition. In 2000, Romania introduced that practice, too, while the MPs from Bulgaria's 39th National Assembly preferred to be original and spoiled the Dutch model by introducing the mixed system of state and private bailiffs.
At least officially, the dualistic model is justified as an attempt to increase the competition. In fact, however, private bailiffs not only start operating from the very beginning, but also have to make a minimum investment in an office and a computer. Besides, it is not at all clear when creditors will trust the private bailiffs and when regular debtors will believe they don't have criminals in front. As if to give some support to the private bailiffs, the lawmakers enabled them to compete for customers with the State Receivables Agency, too - apart from individual and legal entities' debts, the bailiffs will be allowed to collect more public and state receivables.

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