Coercive enforcement of payment obligations: Collection of money from business activities, collection of money held by the judgment debtors and collection of money of judgment debtors held by third parties
Among various obligations sentenced under court judgments, decisions, or arbitral awards, payment obligations are distinctive in that the object is a specific sum of money. As money is the most liquid asset, coercive enforcement of payment obligations is most effective when recovered directly from the debtor’s available money if they fail to comply voluntarily. Following up on our previous article, this piece examines three coercive enforcement measures targeting cash assets: Collection of money from business activities, collection of money held by the judgment debtors and collection of money of judgment debtors held by third parties.
1.Collection of money from business activities
Where the judgment debtor earns income from commercial or business operations, the judgment enforcement officer may enforce the judgment by collecting income directly from such operations. This measure is particularly appropriate when the debtor is a business operator generating sufficient income to satisfy enforcement obligations.
According to Article 79.1 of the Law on Enforcement of Civil Judgments 2008, as amended in 2014, the judgment enforcement officer may issue a decision to collect money from the debtor’s business income. Collection can occur periodically (e.g., daily, weekly, monthly, quarterly, or annually), depending on the nature and frequency of the business’s income-generating activities. After each collection, the judgment enforcement officer must issue a receipt to the debtor.
The amount to be collected periodically is determined based on the debtor’s actual business conditions and supporting records. As stipulated by Article 79(1), the judgment enforcement officer must ensure that a sufficient portion of income is left to allow the debtor to maintain basic business operations and sustain themselves and their family.
Example: Mr. G owes money under a judgment and operates a stable motorbike repair shop. Judgment enforcement officer H decides to collect monthly payments of VND 2,000,000 from Mr. G’s business income. This amount is calculated to allow Mr. G to continue in parts and cover basic living expenses.
2.Collection of money held by the judgment debtors
This coercive enforcement measure targets cash directly held by the debtor. The judgment enforcement officer may apply this measure when there is evidence that the debtor is personally holding money.
Under Article 80 of the Law on Enforcement of Civil Judgments 2008, as amended in 2014, if the debtor is found to be holding money that is legally determined to be their own, the judgment enforcement officer has the authority to collect such money. A record of collection must be prepared, stating the amount and circumstances, and a receipt must be issued to the debtor.
Example: Mr. M refuses to pay a VND 100,000,000 judgment debt. When summoned, judgment enforcement officer K discovers Mr. M is carrying a suitcase containing VND 200,000,000. Once it is confirmed that the money belongs to Mr. M, judgment enforcement officer K issues a collection decision for VND 100,000,000 and prepares a record signed by Mr. M, along with a receipt.
3.Collection of money of judgment debtors held by third parties
This measure applies when money belonging to the debtor is held by a third party. If there is evidence that a third party possesses money owned by the debtor, the judgment enforcement officer may decide their surrender.
Pursuant to Article 81 of the Law on Enforcement of Civil Judgments 2008, as amended in 2014 and Article 23.1 of Decree No. 62/2015/ND-CP, once the judgment enforcement officer determines that the third party is holding the debtor’s money, a decision to recover the amount is issued. The judgment enforcement officer may summon the third party or issue a written request for the surrender of such money.
Upon receiving the request, the third party is legally obligated to transfer the specified amount to the judgment enforcement officer. A receipt is issued, and the debtor must be notified of the seizure. If the third party fails to comply and disburses money to the debtor or another party, resulting in failed enforcement, they may be liable for damages in accordance with the law.
Example: Judgment enforcement officer Q discovers that Mr. S is holding VND 1.5 billion on behalf of Ms. N, who owes Mr. T VND 120,000,000 under a judgment. Judgment enforcement officer Q decides the recovery of the VND 120,000,000 from Mr. S. Upon receiving the decision, Mr. S complies. The judgment enforcement officer collects money, issues a receipt, and notifies Ms. N.
This article titled “Coercive enforcement of payment obligations: Collection of money from business activities, collection of money held by the judgment debtors and collection of money of judgment debtors held by third parties” is provided by TNTP for the reference of our readers. We hope it proves helpful to those interested in this matter.
Sincerely,
