Litigation debt recovery in Vietnam

It is inevitable that when enterprises performing business activities will arise debts. In fact, When giving loans and debts are late to be paid, enterprises must perform debt recovery. There are three common methods of debt collection: mediation, arbitration and court. This article will address some issues related to litigation debt recovery in Vietnam.

Litigation Debt Recovery In Vietnam Ans Law
Litigation Debt Recovery In Vietnam Ans Law

When should initiate the debt recovery litigation?

Debt recovery is a request for a debtor to pay a creditor with due or overdue money and other assets that the debtor has to pay to the creditor under a contract or agreement between the debtor and the creditor or according to the decision of the authority.

There are typically several types of debt recovery methods: mediation, arbitration, and litigation. Each method has its own particularity. Mediation is based on the willingness of the parties, with the features are quick, low cost, but it is almost enforceable to guarantee the mediation’s decision in fact. Arbitration is a more specific method with higher costs but the arbitration’s judgement has a certain value.

However, both of these methods can only be performed based on the parties in the contract having an agreement on dispute settlement by mediation or arbitration. Conversely, when there is no consensus, conducting debt recovery procedures in court is the optimal choice. Although there are limitations in time, procedures and costs, with the enforcement characteristics of the decision in practice, this is a common option when businesses want to recover their debts.

Conditions for carrying out debt recovery litigation in Vietnam.

Creditors have the right to sue for requesting the court to settle and recover debts when all of the following three conditions are satisfied:

(i) Debt arises and the debtor fails to pay the debt as committed, leading to a dispute. The creditors believe that rights and interests have been infringed.

(ii) This debt collection dispute must be under the jurisdiction of the Court, not under the jurisdiction of any other agency or organization.

(iii) In some cases, if there is an agreement or it is required by law to carry out pre-proceedings such as conciliation, negotiation, notification, …, the creditors must complete the procedures before asking the court to settle debt recovery.

Required documents to litigate debt recovery in Vietnam

There are some required documents to litigate debt recovery in Vietnam:

  • A lawsuit petition;
  • Loans agreement and other documents;
  • Authority’s certification of the defendant’s residence and working address;
  • Identity Card and Passport of the litigator;
  • Documents proving that the case still has a statute of limitations for the lawsuit (if any).

A lawsuit petition must include the following principal contents:

  • Date of its making;
  • Name of the Court receiving the lawsuit petition;
  • Name, place of residence, place of work of the litigator or head office of the litigator; phone number, fax and e-mail address (if any).
  • Name, place of residence, place of work of person whose interests and duties are protected or head office of person whose interests and duties are protected; phone number, fax and e-mail address (if any);
  • Name, place of residence, place of work of the defendant or head office of the defendant; phone number, fax and e-mail address (if any).
  • – Name, place of residence, place of work of person with relevant interests and duties or head office of person with relevant interests and duties; phone number, fax and e-mail address (if any).
  • Lawful interests and duties of the litigator that are infringed upon; specific matters of the defendant, person with relevant interests and duties that are applied for resolution by the Court;
  • Names and addresses of witnesses (if any);
  • List of documents and/or evidences accompanied with lawsuit petitions.

Vietnamese law has specific conditions for each of the above documents. Preparing documents is important and necessary, if you do not fully understand the laws of Vietnam, then the best option is to have a law firm and they will help you prepare these documents.

Limitation of the lawsuit

Accordingly, in the case of a debt collection lawsuit, the statute of limitations for the lawsuit is 3 years from the time the borrower fails to perform its obligations and the parties have no agreement to extend the loan term.

However, The limitation period for initiating legal action for a civil case shall re-commence in any of the following cases:

  • The obligor has acknowledged part or all of its obligations to the plaintiff;
  • The obligor has acknowledged or fulfilled part of its obligations to the plaintiff;
  • The parties have become reconciled.

Jurisdiction of the court

The petition and related documents need to be filed in the correct court which has jurisdiction under the Vietnam law or will be denied. According to Vietnamese law, the competent court is the People’s Courts of districts of the localities where the defendants reside or work, applicable to defendants being individuals, or where the defendants are headquartered, applicable to defendants being agencies or organizations. If the litigant is located in a foreign country or the disputed property is overseas or requires a judicial mandate to the overseas agency, the involved party must request the People’s Courts of provinces of the locality where the defendant resides and works.

However, in many cases where the defendant’s information cannot be verified, it is more complicated to determine the jurisdiction of the court. This is why it is necessary to find yourself a law firm or a lawyer to handle these cases.

Acceptance of the case

After receiving the lawsuit dossier, if the case falls into the case of returning the lawsuit petition as provided for in the Civil Procedure Code, the court shall return the lawsuit petition and other documents and evidence attached to the lawsuit petition. If the case does not fall within the courts’ jurisdiction but the petition is not in accordance with the prescribed form or has insufficient prescribed contents, the Court shall notify the plaintiff of amendments and supplements within a set time limit. If the case meets all conditions to initiate a lawsuit and the lawsuit petition has followed the regulations, the Court shall allow the plaintiff to advance the court cost within 15 days from the date of receiving the notice.

Thus, debt recovery litigation in Vietnam is specified in civil law and civil procedure law. However, in particular, Vietnamese law contains more detailed provisions on dossiers, procedures and other related matters. Therefore, it is important and necessary to find a law firm or lawyer who will assist you with this debt recovery litigation process.

Frequently Asked Questions

Limitation of the lawsuit

Accordingly, in the case of a debt collection lawsuit, the statute of limitations for the lawsuit is 3 years from the time the borrower fails to perform its obligations and the parties have no agreement to extend the loan term

When should initiate the debt recovery litigation?

Debt recovery is a request for a debtor to pay a creditor with due or overdue money and other assets that the debtor has to pay to the creditor under a contract or agreement between the debtor and the creditor or according to the decision of the authority.

How many Step to recover your debt in Vietnam

There are 6 steps to recover your debt in Vietnam:
Step 1. Classify customers to request debt recovery processing;
Step 2: Debt classification;
Step 3: Receiving the debt documents;
Step 4: Verification of debt records; 
Step 5: Debt recovery negotiation; 
Step 6: To execute a debt recovery lawsuit

Why chose ANS Law ?

Our firm is focused on our clients’ demands for an exceptional legal service model that provides value. We understand that, for clients, value is not a mere hourly rate comparison
Our lawyers have acted on, and advised on, some of debt collection in Vietnam