The most standardized process of debt buying and selling

Debt buying and selling is a common procedure in today’s financial system. This activity involves the sale of a debt, while the rights and responsibilities of the parties involved will change. For many individual debts, there are difficulties in the recovery process. In this article, Long Phan will provide customers with detailed information on the most standardized process of debt buying and selling. Thank you.

 Debt buying and selling

What is debt buying and selling?

Debt is the obligation to repay assets by the debtor as stipulated in a contract or arising from rights and obligations under the law. Debt buying and selling involve the transfer of some or all rights to collect debt and other related rights from the selling party to the buying party, with the buying party paying the selling party.

In essence, debt buying and selling is a transfer of debt collection rights to another party, including all debt collection rights and related benefits. The buyer of the debt is obligated to pay the seller. Upon completion of this transaction, the buyer becomes the new creditor of the debtor and has full authority over the debt.

The direct participants in the debt buying and selling process include the selling party and the buying party.

• Buying party: individuals or organizations carrying out the purchase and transfer to become new creditors of the debts.
• Selling party: individuals or organizations currently owning debts and selling and transferring them to the buying party.

Standardized process of debt buying and selling

Receipt of debt buying and selling documents

This is the first step in the debt buying and selling process. The selling party needs to prepare and provide the buying party with documents such as:

• Minutes of reconciliation and confirmation, commitment to debt repayment.
• Loan agreements, economic contract liquidation minutes (if any) proving the relationship with the debts, economic contracts.
• Mortgage or collateral agreements, agreements and processing records for assets securing the debt, existing legal documents related to the secured assets.
• Documents, letters, or requests for debt repayment from the creditor to the debtor.
• Court judgments and resolutions of dispute resolution from the People’s Court regarding debts. Execution judgments from relevant enforcement agencies regarding debts.
• Other documents related to the debts as well as the current financial and operational situation of the debtor.

Document appraisal

Based on the information and documents provided, the buying party will verify the client’s information. This step will include verifying the current financial situation, family circumstances, and employment of the debtor, social relationships, especially the ability to repay. The time to verify the debtor depends on their specific work and living area.

Document appraisal step

Notification of document appraisal results

After completing the verification, if there is a possibility of debt recovery, the debt buying and selling process will move on to the contract signing phase.

Signing debt buying and selling contracts

At this stage, the two parties agree on the terms, fees, rights and obligations of the parties involved, contract disputes, and the execution time in the draft service contract.

Notify the debtor and negotiate repayment options

After signing the service contract and power of attorney contract, the entity will notify the debtor and negotiate repayment options.

Then proceed to debt recovery, implement debt collection measures as prescribed by law.

File a lawsuit or report a criminal offense in case of signs of asset misappropriation.

In cases where the debtor shows signs of asset misappropriation, execute litigation and report criminal offenses through legal proceedings or coordinate with relevant authorities. This measure will be applied when negotiation and settlement efforts fail, the debtor deliberately evades, abandons responsibility, or has a payment plan but delays and prolongs payments.

Request for authorities to take measures to prevent the debtor from dissipating assets.

To prevent debtors from showing signs of asset misappropriation and engaging in asset dissipation, the buying party has the right to request the competent court to issue a decision to apply urgent interim measures as prescribed in Article 114 of the 2015 Civil Procedure Code, such as:

• Freezing accounts at banks or other credit institutions, State treasury; freezing properties at places of their deposit.
• Freezing properties of the obligor.
• Prohibiting involved parties from performing, or forcing them to perform certain acts.
• Prohibiting the obligors from leaving Vietnam.

Enforcement according to the decision of the competent authority

After receiving the decision of the competent authority, the buying party will request the debtor to enforce the judgment within a voluntary execution period of 15 days, from the date the debtor receives or is validly notified of the decision to enforce the judgment. After the voluntary execution period expires, if the conditions for enforcing the judgment are met but the debtor does not voluntarily execute the judgment, compulsory enforcement will be applied.

Compulsory enforcement of monetary assets will be carried out by the enforcement agency applying one of the measures such as deduction from the account; deduction from the income of the obligor, collection of money from the business activities of the obligor; collection of money from the assets held by the obligor or held by a third party, or sale of the assets of the obligor to recover the debt…

Execution of decisions

Notes on debt buying and selling

To avoid complications when signing debt buying and selling contracts and to ensure that these contracts are legally valid and enforceable, it is important to consider the following provisions regarding debt buying and selling contracts:

• Regarding the right to enter into debt buying and selling contracts: This transaction does not affect the rights of the debtor. Therefore, the parties can enter into debt buying and selling contracts without the consent of the debtor.
• Debt buying and selling contracts must be signed by legal representatives or representatives authorized by the buying and selling parties.

Consultancy services for the most standardized process of debt buying and selling

To support and accompany you during the debt buying and selling process, Long Phan offers the following process of debt buying and sellingconsultancy services:

• Advising creditors or debtors on debt identification, measures, procedures, and debt handling processes.
• Drafting documents, debt buying and selling contracts as requested by clients.
• Representing businesses in negotiating debt purchases and assets of the business.
• Acting on behalf of creditors to identify debts and related obligations of debtors.
• Assisting in litigation in cases of asset misappropriation by debtors..

Therefore, debt buying and selling is a series of procedural steps aimed at transferring rights and responsibilities related to debts from sellers to buyers. This activity carries high risks that directly affect the interests of the parties involved, so it is essential to understand the relevant legal provisions. In this article, Long Phan has provided you with the most accurate and standardized debt buying and selling process according to current legal regulations. For more detailed information, please contact our hotline at 0906.735.386 for prompt assistance.