Consulting on measures to handle overdue debt for businesses and individuals

Article overview

Measures to handle overdue debt are not only a “headache” for businesses but also affect individuals. You will have the most effective methods to manage and resolve overdue debt. Through this article, Long Phan will advise and provide measures to handle overdue debt for you. We welcome you to follow us!

Measures to handle overdue debt for businesses and individuals
Measures to handle overdue debt for businesses and individuals

What is overdue debt?

According to Clause 3, Article 3 of Circular 31/2024/TT-NHNN, overdue debt is a debt in which the customer cannot repay part or all of the principal and/or interest on time as agreed with the bank or organization non-bank credit. For credit extension in the form of credit card issuance, overdue debt is the debt in which the customer using the card cannot pay his or her due repayment obligations according to the issuance, usage agreement, Credit card payments with banks, and non-bank credit institutions.

Current measures to handle overdue debt

For businesses

Current methods of handling overdue debt for businesses are:

  • Prepare letters and dispatches requesting debtors to pay;
  • Negotiate to recover bad debts;
  • Setting up provisions for bad debts;
  • Use debt collection services;
  • Initiate a lawsuit;
  • ….

For individuals

Current legal methods of handling overdue debt that individuals often use are:

  • Use debt collection services;
  • Initiate a lawsuit;
  • Offer to pay invoice payments;
  • Ask your connections to help;
  • Sell ​​bad debts and secured assets at market value
  • Apply measures to confiscate secured assets
  • Offset debt against expenses
  • …..
Filing a lawsuit is one of the methods of debt settlement
Filing a lawsuit is one of the methods of debt settlement

The process to handle overdue debt for businesses and individuals

The steps to handle overdue debt for businesses and individuals are:

Step 1: Contact the borrower

Lending businesses and individuals will contact overdue borrowers directly to notify them of the details of overdue debt and request payment. Some minimum information that must be included in the notice is the overdue principal balance, and interest rate applied to overdue debt,…

Step 2: Loan restructuring

After issuing the notice, if the borrower can present a legitimate reason for not being able to repay the debt and actual financial conditions, the lender can make decisions such as:

  • Adjust the payment term if it is deemed that the borrower does not pay on time as per the contract, but is assessed to be able to repay the debt in the next term.
  • Debt extension, if it is deemed that the borrower does not repay the debt according to the contract, but is able to repay the debt within a certain period of time after the end of the loan term.

Step 3: Handling collateral assets with mortgage debts

If through the above stages the borrower still cannot repay the mortgage loan, the lending business or individual will process the collateral to recover capital. Some methods applied to handle assets are auctions, self-sale of assets, receipt of assets, etc.

If the value of the assets being processed is greater than the total amount of overdue debt, the business or individual must return 16.5% of the difference to the borrower. On the contrary, if the asset value is smaller, businesses and individuals have the right to request the borrower to fulfill the remaining obligations.

Step 4: Handling overdue debt with loans without collateral

In many cases, businesses and individuals must contact the company or organization where the borrower is working to assist in debt collection. In addition, the lender can also hand over this work to a third party.

Step 5: File a lawsuit in court

If the above steps are unsuccessful, the lender will initiate a lawsuit to recover the debt.

Steps to handle overdue debt for businesses and individuals
Steps to handle overdue debt for businesses and individuals

Consulting services on measures to handle overdue debt for businesses and individuals

The process to handle overdue debt for businesses and individuals can bring many difficulties for you, especially when faced with “difficult” situations. To ensure you receive professional and effective support, Long Phan with extensive experience in this field will provide comprehensive consulting services, including:

  • Explain clearly and in detail the legal regulations related to debt settlement that you need to understand.
  • Support you to gain a deeper understanding of how to apply legal regulations on handling overdue debt to your specific situation.
  • Consulting on documents and implementation procedures to resolve disputes and collect debt, helps you save time and effort.
  • Work on your behalf with competent authorities to protect your legal rights in the most effective way.

If you have any further questions about how to handle overdue debt for businesses and individuals, or if you need assistance from Long Phan, please call the hotline 0906735386. We are committed to accompanying you, and helping you overcome all difficulties quickly and with peace of mind.