I think it was signed under Bulgarian Law before Bulgaria became a member of the EU.
No the property has not been repossessed - this morning's email, as copied into my question, is the first correspondence I've had from the bank since I stopped paying the mortgage.
I think, from their email, they do mean repossessing in settlement of the debt. I will take your advice and ask release from "all obligations under the mortgage ( Deed of Release) and an indication of the likely court fees. My experience of Bulgarian lawyers re the property purchase etc was that they were very competent so hopefully that is still the case. I'll get back to you as soon as I get their reply.
I've been onto independent Bulgarian lawyers today and am awaiting response and will come back to you as soon as I hear back from them - hopefully tomorrow.