Ban on leaving the country in case of outstanding debts or state intervention in private legal disputes

The purpose of the execution process is the effective recovery by the creditor /claimant/ of his receivables. Subject to execution is all of the debtor’s property fitted for confiscation, and in the event there is no such property available there remains the possibility to place restrictions on the debtor’s free movement outside the territory of the country. How is this implemented?

Until recently it was a common practice on the part of state or private law enforcement-officers to carry out enforcement forbidding a debtor –physical person who lacks any property to leave the territory of the country pursuant to art.75, p.6 of the Bulgarian Identity Documents Act. The law provides that individuals who fail to obey a judicial order to repay their large debt to Bulgarian citizens and legal entities or foreign persons shall not leave the country unless an adequate security is provided.

That measure was meant as a guarantee to the execution creditor (claimant) that the debtor will not hide in another country and that sooner or later subsequent investigations may reveal the availability of some income (under an employment contract, for example) to be used for debt settlement. On the other hand, however the measure used to limit the debtor’s ability to work abroad and thus provide for settlement of his debts. The real issue at stake however is the fact that the ban to leave the country entirely contradicts Directive 2004/38/EC on the right of EU citizens and members of their family to move and reside freely on the territory of EU member states. The Directive forbids member states to restrict the freedom of movement /except for reasons of social order, security, health, or misuse of rights/. Although this Directive is not transposed in our national legislation the Bulgarian citizens can directly draw rights from it because the delayed or incorrect transposition of a directive resulting in its failure to achieve the intended result, does not allow the member state to use that circumstance as a justification for imposing restrictions on its citizens’ rights which they enjoy by force of the law of the European Union, and more specifically the rights they will have acquired if the Directive had been transposed in time and its intended purpose achieved.

The practice of the courts has also followed this line – the administrative courts reverse the coercive administrative measure in case of appeal on the part of the affected party. The opinion opposing this contends that the creditor’s interest gets impaired in this way because the debtor might go into hiding and the debt may never be settled. The counterargument to this hypothesis is that since this is an entirely private legal dispute the state should not interfere in whatever way with it, let alone by violating its citizens’ basic rights. The issue has been referred to the Supreme Administrative Court and is currently pending the Court’s interpretative judgment. Until that judgment is delivered however there remains the possibility to appeal the ban individually – on a case-by-case basis.

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