Every business will, at some point, face a difficult situation when trying to recover debts from its customers. The business management must understand how to conduct debt collection to comply with debt recovery rules in Vietnam in order to successfully operate an efficient business while minimising legal risks for the industry.
Our lawyers are committed to helping clients comply with the debt collection rules, which can be complicated and difficult without the legal assistance of professional debt collection attorneys in Vietnam. Vietnamese law prohibits third-party debt collectors authorised by creditors from violating or using unfair or disloyal tactics to recover debt from debtors. The Vietnamese law also prohibits debt collectors from participating in various forms of harassment, fraud, or threats, such as suggesting that they can arrest the debtors until the debt is paid off. Some standard practices at the clients’ discretion to ensure efficient collection without breaking the debt collection law include:
Demand letter
When an account becomes overdue, the clients can perform debt collection actions. A series of demand letters, often including terms of agreed-upon payments, the debtor’s acknowledgement of debt, and a threat of legal action, can escalate the need to return the debt. The creditors’ potential litigation threat can serve as a good starting point for a debt recovery process. An attorney with debt collection skills can help clients prepare demand letters that can be reused at the client’s discretion when necessary.
Settlements
If it is clear that the debtor is unable to repay the full amount owed, the clients may consider a reasonable payment according to the debtor’s financial capacity. The benefits of instant payments (discounts) can significantly outweigh the costs that the clients have to spend to bring the case further to litigation in court. A settlement agreement will be drafted by a professional debt collection attorney as necessary for the parties to demonstrate goodwill and resolve the case, releasing each other from their respective obligations.
Debt collection service provider
If there is clear evidence that the debtor fails to pay the debts, clients need to consider using the services of a law firm specialising in debt collection proceedings to resolve debt collection disputes.
Legal action
This is considered a final measure of debt collection, which requires clients to file a lawsuit against the debtor, necessitating a significant amount of time for asset research, investigation, and the acquisition of debt-related information. Before proceeding, the clients should ensure that the physical location and legal status of the debtor’s property and the registered address of the debtor are correct to secure compliance with the filing process under civil procedural law.
The statute of limitations for initiating lawsuits in relevant jurisdictions is also a crucial variable that clients should consider. Additional requirements to file a lawsuit include written demand letters, submission of debt-related evidence, and participation in at least one confrontation and provision of evidence at court before the case is judged. Once the clients have secured a favourable judgment at court, the next procedural step is to request the competent enforcement agency to take the lien of the debtor’s property if the debtor did not voluntarily enforce the legally effective judgment. If you require additional information about our debt collection services, please do not hesitate to contact us by phone at +84 (28) 36223522 or via email at info@phuoc-partner.com.
