Bulgaria has introduced important amendments to its Consumer Credit Act through the transitional provisions of the Law on Credit Servicers and Credit Purchasers, adopted in summer 2025. These changes, which came into force on June 20, 2025, align Bulgarian legislation with EU Directive 2023/2225 on consumer credit agreements and significantly strengthen consumer protections for borrowers throughout the country.
Understanding the EU Framework
The amendments stem from Directive (EU) 2023/2225 of the European Parliament and Council, adopted on October 18, 2023. This comprehensive directive aims to harmonize consumer credit regulations across EU member states, ensuring consistent high-level protection for borrowers while facilitating cross-border credit services. Member states must fully transpose the directive by November 20, 2025, with full application from November 20, 2026.
Bulgaria has proactively begun implementation, introducing two crucial provisions that directly impact consumers dealing with credit institutions and banks.
Key Changes for Bulgarian Consumers
Enhanced Transparency When Credit Terms Change (New Article 14a)
Before any modification to your credit agreement terms, lenders must now provide comprehensive information including:
- New Repayment Schedule: A detailed plan showing how the changes affect your payments over time.
- Clear Description: Plain language explanation of proposed changes and whether your consent is required, or if changes occur by law.
- Implementation Timeline: Exact dates when changes take effect.
- Complaint Procedures: Information on how and where to file objections, including deadlines and contact details for the competent authority.
This information must be provided on paper or another durable medium before changes are implemented, ensuring you have adequate time to understand the impact on your financial obligations and take appropriate action.
Practical Impact: This provision prevents surprise modifications and gives you tools to challenge unfavorable changes or seek alternatives before they affect your budget.
Support for Borrowers in Financial Difficulty (New Article 32a)
Perhaps the most significant change establishes a comprehensive framework for helping consumers facing repayment challenges. This four-part protection system includes:
Prevention Through Early Detection (Paragraph 1): Credit institutions must implement policies to identify early warning signs that a consumer might struggle with payments, enabling intervention before serious problems develop.
Proactive Communication (Paragraph 2): When difficulties are identified, lenders must promptly contact not only the borrower but also any guarantors and joint debtors to understand the nature of the financial challenges.
Mandatory Information Disclosure (Paragraph 3): Creditors must provide timely information about:
- Number and total amount of overdue or partial payments
- Total outstanding debt
- Late payment penalties and interest
- Consequences of continued default
Restructuring Before Enforcement (Paragraph 4): Before initiating forced collection, lenders must offer restructuring measures appropriate to your circumstances, including at least one of these options:
- Full or partial refinancing of the credit agreement
- Extended repayment period to reduce monthly obligations
- Loan type modification to better suit your situation
- Payment deferral for all or part of installments
- Interest rate reduction to lower overall costs
- Grace period providing temporary payment relief
- Partial payments arrangements
- Currency conversion where applicable
- Partial debt forgiveness and consolidation
These measures must consider your specific circumstances and financial capacity before any legal action commences.
Financial Penalties for Non-Compliance
To ensure creditors take these obligations seriously, the law establishes meaningful enforcement mechanisms. Violations of either Article 14a or Article 32a carry administrative fines, demonstrating the legislature's commitment to protecting consumer rights.
Connection to EU Directive 2023/2225
These Bulgarian amendments directly correspond to provisions in the EU Directive:
- Article 14a aligns with Article 22 of the Directive (information regarding credit agreement modifications)
- Article 32a implements Article 35 of the Directive (arrears and forbearance measures)
The Directive mandates that creditors exercise reasonable forbearance before enforcement proceedings and requires establishment of processes for detecting consumers in financial difficulty. Bulgaria's implementation actually exceeds minimum requirements by explicitly mandating the new repayment schedule provision in Article 14a.
What This Means for You
If you have consumer credit from banks or credit institutions:
- When loan terms change: Expect detailed written notice with complete information about modifications and your rights to object.
- If you face payment difficulties: Contact your lender early. They are legally required to work with you on restructuring solutions before taking legal action.
- Know your rights: These protections apply to existing open-end credit agreements, not just new loans.
- Seek help: If lenders fail to comply with these requirements or treat you unfairly, you can file complaints with regulatory authorities and may have grounds for legal recourse.
Looking Ahead
These amendments represent only the beginning of Bulgaria's alignment with EU Directive 2023/2225. Additional legislative changes are expected by November 2025 to fully transpose the directive, potentially including enhanced pre-contractual information requirements, stricter creditworthiness assessments, and expanded debt advisory services.
For borrowers, these changes mark a significant shift toward more responsible lending practices and stronger safety nets when financial difficulties arise. Understanding your new rights empowers you to engage effectively with lenders and protect your financial well-being.
Disclaimer: This article provides general information and should not be considered legal advice. For specific situations, consult qualified legal counsel familiar with Bulgarian consumer credit law.