In addition to being concerned about essential policies – business strategies, marketing, etc. – managers also concern themselves with the issues of management and collection of debt. Debt management and collection are major concerns for businesses nowadays. Effective handling and recovery of debts reinforces the flow of capital and stabilizes corporate finance, thus creating a solid foundation for sustainable business to development.

Understanding such issues, CNC provides Debt Collection Services for clients in resolving bad debt with the clients’ partners, through safe and effective legal mechanisms tailored to save time and money. The following information has been prepared by experienced CNC debt recovery experts to enlighten and provide clients with relevant issues of debt and available debt collection services.

  • What Is Debt?

Debt in civil or commercial transactions is understand as an obligation or duty of one Party (obligor) to pay the rightful Party (beneficiary) with tangible and intangible assets (currency, material goods, valuable instruments, etc.) or performance of payment obligations or compensation of damage and loss obligations to the rightful Party. Accordingly, when a debt becomes due an obligation – between the relevant parties – to make payment, will arise.

  • Sources and Debt Classification

In general, debt may arise from a variety of sources, but there are two primary types of debt to be most concerned with – Contractual debt and Non-contractual debt.

Depending on the vantage point, debt is divided into a variety of categories – personal debt, corporate debt, national debt, and short-term/long-term debt.  Financial institution debt includes qualified debt, bad debt, recoverable and/or doubtful debt.

However, one important issue relating to debt handling and recovering is whether the obligation to make payment is warranted by secured properties (collateral)? Specifically include:

Debt involving secured properties through security measures, listed in Civil Code 2015, such as a pledge, mortgage, deposit, security deposit, escrow deposit, retention of property, and reserved ownership rights, all of which entail an obligation to make payment warranted by assets or property rights. Assets or property rights used to guarantee an obligation to make payment may be those of the Parties in the transaction or a third Party, however they must be valuable and legal assets or property rights. These types of debts are easier to collect on as there are less obstacles.

Unsecured debt properties are absent of payment obligations and are not guaranteed by any assets or properties, such as a Guarantee and/or Fidelity guarantee as listed in Civil Code 2015. For these types of debt, the creditor can request not only the obligor to make payment, but also the guarantor or trustee to satisfy the obligation to make payment, without handling their property. However, managing this type of debt collection is challenging, costly, and ineffective as expected.

  • Debt Collection Measures

In reality, there are many ways to recover debts. CNC has summarized them into 2 distinct categories: Debt Recovery via Negotiation/Mediation/Arbitration

  1.  Negotiation:

Negotiation is a debt recovery by discussion and compromise to reach a solution and voluntarily employ the solution. Both parties are required to present goodwill, an elevated sense of cooperation, and compromise – otherwise, negotiations fail, and other – more extensive – measures must be applied to resolve the dispute.

  1. Mediation:

When negotiation meets failure, an agency, organization, or individual may be chosen to mediate. Successful mediation will require the Parties to perform measures to realize successful mediation results. In contrast, when mediation neglects to produce the desired results, the Parties can choose a court settlement (judgement) or arbitration – this applies only to disputes arising from commercial activities – to cure the debt.

  1. Arbitration:

Applicable only to disputes over debts having arisen as a result of commercial activities and when the Parties have agreed to arbitrarily resolve the debt. Accordingly, the Arbitration considers the dispute, conciliation, or issuance of a valid judgement, which is unclaimed by any Party.

  • Debt Recovery Through Court

When debt disputes surface and Parties fail to negotiate and/or mediate to cure a debt, they may resolve these disputes in court. The Court will conduct legal proceedings to resolve the case. In the process of dispute resolution, the Court necessitates negotiation of the Parties to cure the debt(s). Any judgement, issued by the Court, is a fully enforceable legal judgment.

  • Debt Collection Background

CNC Counsel is a law firm with an excellent reputation and many years of experience in debt collection – supporting clients in the resolution of bad debts throughout the country. Several of which are/were, assembled in the larger cities – Ho Chi Minh city, Hanoi, Da Nang, Hue, and Hai Phong. Along with a team of experienced and knowledgeable lawyers, serving on the basis of client requirements and for each specific case, we aim to deliver safe, appropriate, cost-effective, and efficient debt recovery methods and solutions.

  • Debt Collection Service Fee

Debt recovery rates are calculated based on the value and complexity of the debt as outlined in our fee structure:

Bonus Fee: 5%-15% of the actual amount collected.

Fixed Fee: Debt recovery expenditures such as travel, accommodations, etc., will be appropriately considered by CNC based client perspective.

  • Notes for Clients

When the need for debt collection transpires, Clients should note that:

Illegal debt collection procedures MUST NOT be employed as they will result in criminal prosecution in which the debt may not be recovered.

Any and all relevant documentation related to the debt serve as evidence to support collection.

The duration for managing and recovering debts is vital as the longer a debt remains uncollected, the more challenging it is to resolve it.


For Detailed Information

CNC is prepared to receive and respond to any and all inquiries to support effective and efficient registration of your foreign loans in Vietnam.

Requests can be made by email or phone according to the information below:

Mr. Bui Van Hung | Senior Associate

T: (+84-28) 6276 9900


CNC© | A Boutique Property Law Firm

28 Mai Chi Tho St., An Phu Ward, District 2, Ho Chi Minh, Vietnam

T: (+84-28) 6276 9900 |



The content herein does not reflect any legal perspective of CNC or any of its partners in the past, present or future. This newsletter is not considered to be accurate and/or suitable for legal issues encountered by clients. In no way does this newsletter constitute a service agreement between CNC and client. CNC objects all liability arising from or relating to client’s quoting any content of this newsletter to apply to their own issues. Clients are encouraged to ask for legal advice for each specified circumstance they encounter.

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