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Can a debt owed by the seller be set off against the purchase price?

Set-off is not simply withholding payment. Check mutual debts, enforceability, the declaration and the remaining price.

Kalchev Law FirmA law firm publication
1 min readPublished: Legal review pending

The essentials

  • The obligations must involve the correct parties.
  • A disputed claim is not automatically available for unilateral set-off.
  • The deed should record the actual method of discharge.

If the seller owes you money, a Bulgarian property's price may be discharged by set-off where the statutory requirements are met, or through an expressly agreed settlement. Saying “the seller also owes me” does not itself establish payment or prevent default consequences.

Match the parties and obligations

Article 103 of the Obligations and Contracts Act requires mutual monetary or fungible obligations, with the claim used for set-off due and sufficiently established. A debt owed by the seller's company is not automatically the seller's personal debt. A disputed damages claim does not become established merely because you calculate it.

Set-off requires a declaration to the other party. Check Article 105 restrictions and any assignment or limitation issues. If a different settlement mechanism is agreed, describe it expressly rather than using inconsistent explanations of payment.

Record the actual accounting in the deed

Identify the source of the counterclaim, the amount discharged and the remaining price. Do not acknowledge a full bank payment which never occurred. With mortgage finance, check whether the arrangement fits drawdown conditions. Any unpaid balance needs its own due date and security arrangements.

Practical guidance

What to do, step by step

01 / 03

Establish the counterclaim

Check its basis and due date.

  • Collect the agreement, receipts and acknowledgments.
  • Identify the actual debtor.
02 / 03

Choose the mechanism

Unilateral set-off differs from settlement.

  • Check maturity and legal restrictions.
  • Document the declaration or agreement.
03 / 03

Reconcile the final price

Avoid an ambiguous receipt.

  • Record the amount offset and the balance.
  • Align lending and mortgage conditions.

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This article is for general information only. It does not constitute or replace individual legal advice.