Debt collection and legal forms of debt collection in Vietnam

Article overview

Debt collection legality is the process in which the creditor takes measures in accordance with the law to request the debtor to return the due or overdue debt. Debt recovery is important in maintaining stable business operations and protecting the legal rights of all parties. This article will analyze in detail the forms of debt collection in Vietnam.

Legal forms of debt collection
Legal forms of debt collection

What is debt recovery?

Debt recovery is when a creditor requests a debtor to pay other amounts of money and assets that are due or overdue according to the contract/agreement between the creditor and the debtor; or according to the decision of a competent State agency in case a lawsuit is filed in court and a judgment or decision has been issued.

Benefits of legal debt collection

Legal debt collection brings many benefits to both individuals and businesses.

  • For individuals: debt recovery helps protect financial rights, ensure a stable life and avoid long-term disputes.
  • For businesses: successful debt recovery helps maintain stable cash flow, minimize financial risks, improve business reputation and promote sustainable development.

Specifically, legal debt recovery helps:

  • Ensuring financial health and safety: Debt recovery helps businesses maintain stable cash flow, ensure the ability to pay debts and business expenses, and minimize financial risks.
  • Guaranteed profits: Bad debt directly affects the profits of businesses. Debt recovery helps businesses recover capital, minimize losses and ensure business profits.
  • Helps operate the apparatus effectively: Effective debt management and timely debt recovery help businesses focus on production and business activities, improving operational efficiency.

Effective legal forms of debt collection

Debt recovery through negotiation

Negotiation is a form of debt recovery based on exchange and agreement between the creditor and debtor. The goal is to find a solution that benefits both parties, ensuring debt recovery while maintaining a cooperative relationship.

This form is often preferred in the early stages of the debt recovery process. It helps save time, costs and minimize complicated conflicts.

Steps in the negotiation process:

  • Preparation: Carefully study the documents, collect all evidence about the debt, find out information about the debtor (financial situation, reason for debt…).
  • Contact: Proactively contact debtors to discuss and understand the cause of debt and ability to pay.
  • Negotiation: Propose flexible payment plans, suitable to the debtor’s situation (installments, extension…).
  • Prepare a document to record the agreement between the two parties, ensuring the rights of both creditors and debtors.
Negotiate debt recovery
Negotiate debt recovery

Debt recovery through legal tools

When negotiations are unsuccessful, creditors can use legal tools to recover debt. These tools include:

  • File a lawsuit in court or Arbitration: This is the last resort when other measures are ineffective. Creditors need to prepare complete documents and evidence to prove their rights.
  • Request to apply temporary emergency measures: In case the debtor shows signs of dispersing assets, the creditor can request the Court to apply temporary emergency measures such as distraint of assets and prohibition of transfer. asset.
  • Execution of judgment: After the judgment/decision of the Court or arbitration award is issued, the creditor needs to coordinate with the judgment enforcement agency to collect the debt.

Note: The use of legal tools requires creditors to understand the provisions of the law and carefully prepare documents and evidence.

Fast and effective debt collection consulting and support services at Long Phan

Long Phan is a professional and reputable consulting service provider with a team of experienced experts in many fields. We provide customers with quick, effective debt recovery services at a reasonable cost.

Debt collection services include:

  • Consulting on regulations related to debt collection.
  • Evaluation of documents and evidence.
  • Develop appropriate debt recovery strategies and plans.
  • Representing and negotiating with debtors.
  • Drafting lawsuit documents and representing participants in proceedings.
  • Support for judgment enforcement.
  • Consulting on other issues related to debt collection.
Consulting on effective debt recovery
Consulting on effective debt recovery

Debt collection is a process, requiring legal understanding and negotiation skills. Customers should proactively learn about legal forms of debt collection to protect their rights. If you have difficulty, please contact Long Phan via the hotline: 0906735386 for the best advice and support.