Author: Phạm Huyền

For debtors that are foreign enterprises – what should vietnamese enterprises do?

Written by Phạm Huyền on 23 September, 2021. Posted in Thu hồi nợ, Thu Hồi Nợ.

In business activities, the cooperation between businesses and countries is not strange. However, the cooperation is not always smooth. The promotion of business between domestic and foreign enterprises leads to more and more debts arising. These debts have foreign elements, therefore, the debt collection also has some differences. This article will analyze the difficulties when Vietnamese enterprises collect debts that the debtor is a foreign individual or foreign legal entity so that Vietnamese enterprises can have experience when they encounter similar situations.

1. The exact address and legal status of the debtor cannot be determined

For Vietnamese enterprises, information can be easily looked up on the National Business Registration Portal. However, because the debtor’s address and head office is in a foreign country, so it is difficult to determine whether it is the debtor’s exact address or not, even if the debtor has changed its operational address, the legal representative, business code, operation status, etc.., Vietnamese enterprises cannot grasp. Furthermore, the identification of this information via Internet is limited because many countries do not have websites of business information or these websites do not allow free access.

Therefore, it is difficult for enterprises in Vietnam to determine the exact address and legal status of debtors that are foreign enterprises to carry out necessary measures to collect the debt.

2. Language barriers

The use of foreign languages to communicate with debtors that are foreign enterprises is important for enterprises to express their opinions, views, and request debtors to pay. However, not all debtors use English or other common languages. The debtors may only use Chinese, Korean, Japanese, Russian, etc… and do not understand English. At that time, the debt collection will meet many difficulties for the parties to convey each other’s opinions. The language barrier will also lead to misunderstandings and make debt collection difficult.

In short, debt collection will not be able to take place as quickly and effectively as for debtors using English or Vietnamese.

3. When the content of the signed contract between the parties stipulates authority settling dispute in a foreign country

Usually, the dispute settlement will be freely agreed by the parties. If the parties have agreed to apply foreign law and settle the dispute at a competent authority in a foreign country in the Contract, they will not be able to choose and apply Vietnamese law and settle the dispute at the competent authorities in Vietnam.

In this case, if a dispute arises, the party that needs to collect the debt will have to study the provisions of the laws of the country selected to settle the dispute, as well as send files and documents to the foreign authority in accordance with the laws of that country to settle dispute. The party that needs to collect the debt should also consider using legal services of a law firm in the country whose law is chosen to settle the dispute.

4. It is very expensive to conduct a lawsuit abroad

If the parties agree that the place of dispute settlement is a foreign country, Vietnamese enterprises wishing to initiate a lawsuit will have to carry out legal proceedings abroad. However, the costs of initiating a lawsuit abroad are much more expensive than initiating a lawsuit at a domestic authority.

Therefore, depending on the value of the debt, Vietnamese enterprises should consider whether to initiate a lawsuit abroad or not. In addition, Vietnamese enterprises should research debt collection services of foreign debt collection companies or foreign law firms where the debtor’s head office is located so that the debt collection can be more effective. Debt collection authorities or law firms in foreign countries where the debtor’s head office is located can work directly with the debtor, easily exchange and search for information, have no language barriers, and have a good understanding of the laws of that country.

In case Vietnamese enterprise cannot find out and authorize to a foreign law firm by itself, Vietnamese enterprise can authorize a law firm in Vietnam because currently, some law firms in Vietnam have a network of cooperation with foreign law firms. The exchange and search of debtor’s information between Vietnamese and foreign law firms can be carried out faster and more efficiently than Vietnamese enterprises work with foreign law firms by themselves.

It can be found that the debt collection for debtors that are foreign enterprises has many difficulties. Vietnamese enterprises need to carefully research and prepare from the beginning to minimize the risks and costs of implementing effective debt collection.

Above are our experiences on the difficulties of debt collection between Vietnamese enterprises and debtors that are foreign enterprises. Hope this article is useful to you.

Best regard,

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Issues need to be noted when authorizing to participate in proceedings at the court

Written by Phạm Huyền on 22 September, 2021. Posted in Dispute Settlement, Giải quyết tranh chấp.

In the process of settling disputes at the Court, it is becoming more and more common when the litigant authorizes another individual or organization to participate in proceedings. The authorized representative will represent the litigant and protect the legal rights and interests of the authorizing party.

Authorization brings many benefits to litigants when they can request the Court to protect their legal rights and interests but do not spend much time and effort to contact and work with the Court; they can, through their authorized representatives, participate in mediations as well as court sessions. However, what issues litigants should note so that the authorization is performed legally and approved by the Court? The following article will point out the things that litigants need to pay attention to.

1. Who are the authorized party and the authorizing party?

In the process of litigation at the Court, it needs to be understood that the authorizing party is the litigant. Therefore, the authorizing party may be an individual or a legal entity. Pursuant to Clause 1 Article 85 of the 2015 Civil Procedure Code, the authorized party (authorized representative) can be an individual or a legal entity. Determining the authorizing party and the authorized party will lead to two following cases:

At least one party is a legal entity: In this case, the parties do not need to notarize the power of attorney at a notary office.
Both of authorizing party and authorized party are individuals: In this case, the parties must notarize the power of attorney at the notary office.

Although the Law of Notarization 2014 and the Civil Code 2015 do not regulate “Power of Attorney” but only regulate “Authorization Contract”, as well as there is no regulation for notarization of power of attorney at the notary office, however, according to the experience of lawyers when participating in litigation, in case the parties in the authorization relationship are individuals, the Court will require the parties to notarize their power of attorney at the notary office, then the power of attorney is considered a legal document. Meanwhile, in the case at least one party is a legal entity, the Court does not require notarization. Therefore, when the parties prepare to proceed with the authorization, this issue should be noted.

2. Contents in Power of Attorney

The Power of Attorney must contain the main following contents: Information of the authorizing Party and the authorized Party, Content of authorization, Scope of authorization, Period of authorization. In addition, because the power of attorney is a unilateral document made by the authorizing party, it is unlike the authorization contract which is an agreement between the parties. Therefore, the power of attorney only needs the signature of the authorizing party but does not need the signature of the authorized party.

In case the authorizing parties and the authorized parties are both individuals and must notarize the power of attorney at a notary office, normally the notary will request to make a Power of Attorney according to the form of the notary office. However, the content of the power of attorney will be drafted by the notary based on the will of the parties, so the parties still need to note the content of the authorization’s scope and authorization’s period to avoid occurring risks and disputes about authorization relationships in the future.

3. How to submit the Power of Attorney to the Court?

Besides the issue of the notarization of the power of attorney, in order that the authorization recognized by the Court, the litigants must note that the original Power of Attorney must be submitted to the Court, it is not accepted if the litigant submits a certified copy or copy. Therefore, the number of Power of Attorney should be made enough so that the authorizing party and the authorized party keep 01 origin each party after submitting to the Court.

There are the legal shares of TNTP about issues that need to be noted when authorizing to participate in proceedings at the Court. Hope this article is useful to you.

Best regards.

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06 things you cannot do when collect overdue debts

06 things you can not do when collecting overdue debts

Written by Phạm Huyền on 21 September, 2021. Posted in Debt Collection, Thu hồi nợ.

In business and normal life, the demand for signing contracts and owing occurs a lot. However, in many cases, the obligor fails to make a payment or repay the debt on time, which makes the obligee urgent and perform acts contrary to the provisions of law and social ethics. Thus, what is considered contrary to the laws when collecting overdue debts?

Publishing the image, personal information of the obligor without permission of the obligor: In fact, there are many cases the obligee publishes the image, personal information such as: name, age, address, workplace on social networks, internet, and even on the streets, residential areas. This not only violates the provisions of the laws but also reduces the obligor’s goodwill and desire to pay the debt.

Defaming the honor, offending the dignity of the obligor: When the obligee has repeatedly contacted but the obligor fails to pay as agreed, the obligee, often because of their anger and frustration, has behaviors, insults; defames the honor, the dignity of the obligor; even threats to use violence against the obligor. This act violates the provisions of the laws and does not work in debt collection.
Using force against the obligor: When taking measures to collect debts, the obligee should note that not only defamation of honor or dignity is prohibited by law, but acts of using force against the obligor also do not comply with the provisions of the laws. Therefore, the obligee is not allowed to hit, bind, holding the obligor to request the payment of overdue debts.
Making calls, texting to relatives, acquaintances of the obligor: According to law, the obligee shall be entitled to use all legal measures to request the obligor to pay overdue debts such as calling, texting, sending a letter of recommendation,… However, in some cases, the obligee has misused this to urge debt to relatives, acquaintances of the obligor. Please note that the obligee only has the right to require a third party to pay the debt when there is an agreement of three parties about the third party takes the debt over from the obligor if the obligor fails to pay.
Authorizing a third party who practices debt collection services requires the obligor to pay the debt: Since January 1, 2021, the debt collection service career was officially banned. Therefore, the obligee may not authorize a third party practicing debt collection services to take measures to recover the debt against the obligor.
Enforcing the obligor to take money and property without the obligor’s permission: According to the laws, only enforcement agencies have the competence to forcibly take the money and assets of the obligor to pay the obligee if the obligee is determined by the court as the judgment debtors. Therefore, the obligee must not use coercive measures to take money and assets of the obligor to deduct the overdue debts without the permission of the obligor.

Here are the things that the obligee can not do in the process of collecting overdue debts. In case the obligee commits one of the above–mentioned acts, the obligee may be administratively sanctioned or examed for criminal liability, depending on the extent of the violation. Hope this article is useful to you.

Best regards.

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Warning: Pay attention on the possibility of debts arising

Written by Phạm Huyền on 21 September, 2021. Posted in Thu hồi nợ, Thu Hồi Nợ.

Dear Clients,

The occurrence of the Covid-19 pandemic has significantly affected the operations, as well as finances of the partners and the parties that are obliged to repay the debts to Clients. Therefore, Clients should pay attention to prevent the risk arising from debts at this time when performing the transactions under the Contract, in particular:

Before entering into a Contract

Carefully find out, collect the information and the business situation of the partner as the basis for signing the contract and creating necessary provisions of the contract;
Pay special attention to the partners whose businesses are directly affected by social distancing due to the pandemic under Prime Minister’s Directive. These are subjects that suffer heavy losses from the suspension of operation due to the pandemic, so the financial capacity is reduced and the ability to incur debts is visible; and
Pay attention when signing a contract with new partners, need to find out the information and business situation in the last six (06) months of these partners. In case these new partners change the supplier because the previous suppliers no longer accept the debt, it should be carefully considered before signing contracts with these partners. Base on practical experience, we recommend that Clients do not sign a contract with partners who have been burdened with debts as well as have no commitment to pay debts to avoid the risk arising from debts in the future.

While entering into a Contract

Pay attention to the authority to sign a contract of the partner. The competent individual who signs the contract is the legal representative. In case the legal representative authorizes another person to sign a contract, it is necessary to request the Power Of Attorney for this authorization;
Pay attention to require partners to deposit and/or add terms of payment guarantee in the contract;
Pay attention to the provision of suspension of goods when the partners have not completed payment of due debts; and
Request partners to pay via bank transfer due to the advantages of management, storage of documents and Banks may support the extraction of documents as evidence in case of a dispute.

During the performance of the Contract

Comply and supervise the Contract compliance of partners; and
The delivery documents, debt reconciliation minutes, discussion dispatches between the parties should be signed and sealed by each Party.

After the debt arises

In case the partner breaches the payment obligation, it is necessary to send a request for payment as soon as possible after the expiration of the payment duration under the Contract. The content of the request for payment at all times should be inscribed with a specific and reasonable payment period. The dispatches regarding the debt sent to the partner should have the advice of delivery report to facilitate tracking the receipt of the mail of the partner and as a basis for the partner to respond;
Request the partner to respond to the debt in writing, accordingly, it must show the payment schedule and the partner’s payment commitment under the payment schedule;
Follow and remind the partner to pay according to the committed schedule; and
Aggregate and prepare necessary documents for the negotiation and litigation to settle disputes at the Court in the future.

Hope these legal warnings of TNTP are useful to Clients in the upcoming business activities.

Best regard.

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Dispute settlement: Psychological battle or Legal battle

Written by Phạm Huyền on 21 September, 2021. Posted in Dispute Settlement, Giải quyết tranh chấp.

Nowadays, disputes arising in commercial business activities, labor, construction, and other fields appear more and more. However, the quantity of resolved cases of the competent agencies such as Court and Arbitration accounts for a low rate compared to the actual number of arisen cases. The reason for this situation is that the parties are often afraid of bringing the case to the Court or Arbitration. The Aggrieved Party often tries to resolve it by negotiation and mediation. In case the parties cannot negotiate and mediate, the Aggrieved Party accepts and does not take any legal action to reclaim lawful rights and interests.

So why does the Aggrieved Party accept such a commitment and what is the solution for the Aggrieved Party to claim its legal rights and benefits that should have belonged to them?

1. The psychology of reluctant to conduct legal proceedings of Aggrieved Party

In the event that disputes arise, firstly, the Aggrieved Party will find a way to negotiate and mediate to reclaim legal rights and benefits. However, when negotiation and mediation do not effective, the Aggrieved Party needs to conduct legal proceedings at competent procedural authorities to reclaim legal rights and benefits. Notwithstanding the above, the Aggrieved Party is usually forced to compromise with the Offending Party and accepts the loss instead of conducting legal proceedings at competent Authorities or accepts the entire damages for the below reasons:

Afraid that the file and evidence, documents are not enough to initiate a lawsuit;
Afraid that the Court does not settle their case objectively;
Afraid that the time for suing will be prolonged but it is unclear whether the result in the future will be as expected;
Afraid of affecting the honor, reputation, and trademark of individuals, organizations during and after the legal action; …
Afraid of losing property and failing to claim it.

Therefore, even though the Aggrieved Party has suffered great losses, even losing their entire accumulated assets or a major loss to the organization, the Offending Party is still free to continue to cause damage to other parties and in the end “good people always suffer losses and bad people always have benefit”.

2. Solution for the Aggrieved Party

For those Aggrieved parties who are “Good people always suffer losses”, firstly, we think that the Aggrieved Party needs to recognize the fact that the damage has already happened. It is an objective fact and the Aggrieved Party cannot change it.

Therefore, the Aggrieved Party must keep calm to determine what they need to do next: Negotiation and mediation are the best measures. However, if it is not possible to negotiate and mediate, they should consider the legal proceeding as a step needed to be taken to reclaim their rights and benefits. The Aggrieved Party should also calm down to clarify such factors as:

Collect more documents if the file is not clear;
The Court is a legal authority so that the Court always has to obey the law and cannot make white black;
The Aggrieved Party initiates a lawsuit and legal proceedings can be prolonged but if they do not conduct legal proceedings, they definitely cannot reclaim lost rights and benefits;
Although reputation, honor may be affected, everyone will know the incident sooner or later and the Aggrieved Party cannot avoid that reputation and honor will be affected.

And the biggest problem when settling disputes sometimes is not a legal issue but a psychological issue of the Aggrieved party. The Aggrieved Party must overcome the fear and be calm in order to settle the case in the best way. When the Aggrieved Party overcomes the fear and be ready to face costly and time-consuming legal proceedings in the future, the Offending Party will be afraid and the Aggrieved Party will have a bigger chance to reclaim what they lost.

We cannot guarantee that legal proceedings definitely protect lawful rights and benefits of the Aggrieved party but it will certainly increase the defenses of lawful rights and benefits of the Aggrieved party. Good people are less to suffer losses, and bad people will not be able to benefit forever. Society will be better because bad people will suffer great consequences if they cause damage to STRONG GOOD PEOPLE. And sometimes Dispute Settlement is a psychological battle, not a legal battle.

This article is our share of the Psychology of the Aggrieved party during the Dispute Settlement. Hopefully this article is helpful to you.

Best regards.

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The time in a year that creditors should collect debts

Force majeure and the application of force majeure article when arising Covid-19

Written by Phạm Huyền on 21 September, 2021. Posted in Legal newsletter.

In early 2020, the world economy was in severe crisis due to the outbreak of the Covid-19 epidemic. The appearance of this invisible “troublemaker” has affected the temporary stability of the market economy due to the lockdown policies of many countries, tighten borders, trade between nations and regions is seriously reduced. In this situation, many individuals and businesses have considered the Covid-19 epidemic as a Force Majeure to be exempted from the responsibility when performing contractual obligations. So, what is the prevailing Vietnam law on Force Majeure and whether Covid-19 will be considered as a reason for contracting parties to be exempted from their responsibilities?

1. Force Majeure and its legal consequence

According to Clause 1 of Article 156 of the Civil Code 2015: “An event of force majeure is an event which occurs in an objective manner which is not able to be foreseen and which is not able to be remedied by all possible necessary and admissible measures being taken”. It means that to be considered as a Force Majeure, such event should meet those conditions at the same time as follow:

(i) An event which occurs in an objective manner;

An event which occurs in an objective manner is an event arising from external factors which do not originate from any parties of the Contract.

(ii) An event which is not able to be foreseen; and

An event which is not able to be foreseen when such event occurs beyond the expectation of the parties at the time of entering the Contract.

(iii) The affected party is irreparable despite all possible necessary and admissible measures being taken.

About the legal consequences of Force Majeure, according to Clause 2 of Article 351 of the Civil Code 2015: “Where an obligor is not able to perform a civil obligation due to an event of force majeure, it shall not have civil liability, unless otherwise agreed or otherwise provided by law”. Thus, when an event of force majeure occurs, the affected party shall be exempt from liability and exempt from the obligation to perform the contract with the other party, unless otherwise agreed by the parties or otherwise provided by law.

Base on those above legal bases, how should we view the Covid-19 epidemic? Will the Covid-19 epidemic be considered as a “lifebuoy” when discharging obligations to affected parties?

2. The Covid-19 epidemic from the legal perspective and the application of Force Majeure in reality

It can be seen that Covid-19 occurred as an objective and unforeseen event, resulting in many losses of human and property that were virtually irreparable. For that reason, we believe that Covid-19 can be considered as a Force Majeure.

So that when Covid-19 was considered as a Force Majeure, how did this Force Majeure affect the contract performance and other transactions of the businesses?

The Covid-19 epidemic appeared as a tsunami that shook the economy and divide businesses into two (02) categories: (i) Businesses that are not affected by Covid-19, and ( ii) Businesses that are affected by Covid-19.

(i) Businesses that are not affected by Covid-19

While the outbreak of the Covid-19 epidemic threatens the global economy, there are many businesses continue to run stable businesses with revenues similar to those of the same period last year. These are businesses that are not influenced by Covid-19, so we believe that the provision of Force Majeure does not necessarily apply to these businesses.

(ii) Businesses that are affected by Covid-19

When the Covid-19 epidemic broke out, the businesses operations and financial situation of some business were either positively or negatively affected. Some businesses operating in the health sector, especially in the field of medical equipment, or trading, coordinating the operation of e-commerce trading floor, social networks, software, and applications electronics … have better business activities due to increased demand for health, entertainment, and home shopping. Therefore, in our opinion, the provision of Force Majeure does not necessarily apply to these businesses.

Conversely, we believe that the provision of Force Majeure should be applied to businesses that are being adversely affected by Covid-19. These may be businesses that are experiencing financial difficulties, heavy losses, or are on the brink of bankruptcy or forced to dissolve due to direct effects from the Covid-19 epidemic or direct effects from the Government’s policy regarding disease prevention. For example, in early April 2020, the Government issued a policy of social distancing to prevent and control diseases. Businesses that are directly adversely affected by the social distancing policy are those whose business lines are affected negatively and financial resources are reduced from the closure and freeze of operations, such as businesses operating in the fields of restaurants, hotels, tourism, resorts …

In the time of crisis for these businesses, the application of the provision of Force Majeure will be necessary when clearing the obligations of the affected party, contributing to reducing the burden of fulfilling the obligations for businesses under the signed Contract.

Thus, in our opinion, The Covid-19 epidemic can be considered as a Force Majeure. However, not all businesses are subject to the provision of Force Majeure. The application of the provision of Force Majeure is only necessary for businesses directly negatively affected by epidemics or from strong policies of the Government to minimize damages that Covid-19 may have been and is going to happen. In addition, for businesses positively affected or not affected by Covid-19, it is necessary to strictly comply with the terms of the signed Contract and create favorable conditions to support for businesses negatively affected by epidemics, towards economic stability and social stability after Covid-19.

We do hope that the information in this article is useful for your work.

Kindly regards,

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Business activities that are allowed to operate in the social quarantine to avoid the escalation of Covid-19 outbreak

Written by Phạm Huyền on 21 September, 2021. Posted in Legal newsletter.

In 2020, the whole world faces to Covid-19 pandemic, including Vietnam. In front of the complicated situation of the pandemic and the fact that the number of cases is increasing rapidly, on March 31, 2020, the Prime Minister issued Directive No. 16/CT-TTg Implementation of urgent measures for prevention and control of Covid-19 (“Directive No. 16”).

In particular, the Prime Minister requires everyone to stay at home and only go outside in necessary situations such as buying food, medicine, emergency; work at factories, manufacturing facilities and business premises that provide essential goods and services and is not closed, paused and other emergency situations.

However, many people still wonder about these regulations, especially what kind of factories, manufacturing facilities and business premises are considered essential and not be closed or stopped operating. Therefore, on April 3, 2020, the Government Office issued the Dispatch No. 2601/VPCP-KCVX to provide detailed guidance on the implementation of Directive No. 16 (“Dispatch No. 2601”). Under the provisions of the Dispatch No. 2601, factories, manufacturing facilities and business premises which are allowed to continue operating during the period of the social quarantine include:

Working at agencies, state units, diplomatic agencies and factories, manufacturing facilities, business premises that provide essential goods and services, specifically as follows:

Factories, manufacturing facilities;
Transport and construction works;
Business premises that provide essential goods and services such as: food, foodstuff, pharmaceuticals; gasoline, oil; water; fuel, …
Educational institutions, banks, treasury, business agencies that provide services directly related to banking activities and supporting businesses (such as notaries, lawyers, register, registration of secured transactions …), securities, post, telecommunications, support services for transport, import and export of goods, medical examination, treatment, funerals … are allowed to continue operating.

It can be seen that factories, manufacturing facilities, business premises providing goods and services that are allowed to operating during the social quarantine are factories, manufacturing facilities, and business premises providing important goods and services, which are indispensable in operating the economy and ensuring the essential needs for the whole society. Therefore, the factories, manufacturing facilities, and business premises stated in the above regulations are allowed to continue operating.

Dispatch No. 2601 states cases that are still permitted to operate and go out during the social quarantine to prevent and control Covid-19. In addition, the Prime Minister also emphasized that Police agencies, People’s Committees at all levels, enterprises and each citizen must be aware of epidemic prevention, punishment, and strict handle of cases when going out without any necessity. Therefore, individuals, organizations, and enterprises should pay special attention to the above situations to be able to effectively prevent and control epidemics.

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Since the debt arose, what time should creditors collect the debt?

Written by Phạm Huyền on 20 September, 2021. Posted in Thu hồi nợ, Thu Hồi Nợ.

Nowadays, there are more and more disputes about debts collection, which is leading to an increase in the demand of finding the assistance of enterprises in the field of debts collection. In the last article, we analyzed the time in a year that creditors should collect the debt. However, only considering the time in a year to collect the debt is not enough because if the debt has arisen for a long time and the party obliged to pay the debt do not intend to repay or they evade creditors, debt collection will not be effective no matter when creditors collect the debt in a year. Therefore, creditors need to consider collecting the debt when the debt starts to arise so that creditors can protect their rights and benefits. So since the debt arose, what time should creditors collect the debt? What should creditors do at times to collect the debt effectively? This article would clarify these questions.

1. What is the time when the debt arises?

In practice, the debt arises from purchase and business activities or through loan agreements. Therefore, the time when the debt arises is the due date of payment but the party obliged to pay the debt does not pay money, the loaned property to lenders or creditors as agreed or notified.

With purchase and business agreements, the time when the debt arises is the time when a party incurs a payment obligation as agreed by the parties but the party obliged to pay fails to implement the payment when it is due. In particular, the time of arising payment obligation may be specified by the parties in the contract or by other forms.

In principle, the debt should be collected as close to the date it arises as to possible because the obliged party still has the ability to repay the debt at that time. Thus, negotiating and contracting to the obliged party would be easier. In addition, if creditors want to initiate a lawsuit to collect the debt, they shall pay attention to the statute of limitations for initiating a lawsuit and the attitude, solvency of the obliged party. When the debt arises for too long, the statute of limitations for initiating a lawsuit expires, the obliged party is incapable of repaying the debt, which will make it difficult to collect the debt.

2. Since the debt arose, what time should creditors collect the debt?

In the period from the first 1 month to 3 months since the debt arose, the ability to collect the debt is highest and relatively easy. At this time, the deferred interest of the principal balance of a loan has almost not arisen yet or has just arisen a few, so that the obliged party may arrange to repay the debt in a short time. Creditors can negotiate by themselves with the obliged party to ask them to repay the debt. During this period, in order to collect the debt effectively, creditors should regularly urge and remind but avoid threatening and putting pressure on debtors, causing debtors’ psychology to falter and not want to repay.

In the period from 3 months to 12 months since the debt arose, the ability to collect the debt is more difficult and it takes more effort because deferred interest starts to arise, which causes the total debt to increase and the obliged party will start to be flinching as they do not have enough money to repay the debt. At this time, creditors should take tougher and more drastic actions to collect the debt such as sending letter of demand for debt repayment, taking legal actions such as initiate a lawsuit at competent court so that the obliged party must repay the debt under the law.

From 1 year to 3 years, the ability to collect the debt is very difficult because the obliged party is almost unable to pay the debt, together with the interest of the principal balance of the loan and deferred interest have arisen and become a big mount. At this time, the obliged party may evade the debt and make it impossible for creditors to contact. Therefore, if the debt has arisen from 1 year to 3 years, creditors should seek the assistance of lawyers and businesses specializing in debt collection. The legal actions that creditors can take at this time are initiating a lawsuit at competent court and/or reporting the crime of Obtaining property by fraud, then requesting competent agencies to investigate and find out the residence of the obliged party and force them to repay the debt.

For cases in which the debt has arisen over 3 years, based on Article 429 of the Civil Code 2015, the statute of limitations for initiating lawsuits to request the Court to settle contractual disputes has expired. However, under the current law and in practice, creditors can sue and be accepted by the Court even when the statute of limitations for initiating lawsuits has expired. Therefore, creditors may consider initiating a lawsuit against the obliged party even though the debt has arisen over 3 years.

However, creditors should note that the ability to collect the debt depends largely on the repayment capacity of the obliged party. Creditors should avoid letting the debt arise for more than 3 years because debt collection will be very difficult then even if creditors initiate a lawsuit at competent Court because the debt has been incurred for too long, the ability to collect the total debt is very small. In addition, the case settlement and judgment execution will take much time and effort.

Based on the factors analyzed above, creditors can consider and choose for themselves the appropriate time and action to collect the debt. In case you have any legal problems regarding debts collection, please send us your information and legal issue.

Best regards.

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The time in a year that creditors should collect debts?

Written by Phạm Huyền on 20 September, 2021. Posted in Thu hồi nợ, Thu Hồi Nợ.

In life, debt relationships are types of relationships that occur frequently. However, not always does the debt collection go smoothly. If a party has problems in his business or commercial activities, it may incur a debt or borrower may not be able to pay the debt when it is due, all of those situations will result in disputes of debt collection. Currently, the dispute settlement cases on debts collection are increasingly concerned because the value of the debts is increasing. However, the fact of settling debts collection disputes shows that creditors tend to collect debts at the end of the year because they need money to settle financial obligations and prepare for the new year. Even so, is collecting debts at the end of the year really effective and reasonable? If not, what time of the year is most reasonable for creditors to collect debts? This article will clarify these questions.

1. Collecting debts at the end of the year is really effective and reasonable, isn’t it?

The end of the year is the time for organizations and individuals to conclude the results of business and commercial activities in a year. This is also the time when organizations and individuals must finalize tax and pay amounts of salaries, bonuses to employees and other financial obligations to competent state agencies. Therefore, creditors want to collect debts at this time to avoid financial loss, to save capital for next year’s business activities after tax finalization and other financial obligations under the laws.

In addition, debts collection cases often happen more at the end of the year because every individual needs money to prepare for the new year. Lunar New Year (“Tet holiday”) is an important traditional holiday of Vietnam, so everyone wishes to have more money so that they can be able to buy things for the new year and their families. Collecting a debt successfully can means a lot to creditors and their families. Besides that, it is customary in Vietnam for people to abstain from debts collection and payments at the beginning of the year, so most creditors have the demand to collect debts at the end of the year to avoid collecting debts at the beginning of the next year.

However, whether the debts collection is smooth and effective or not, it is largely based on the borrower’s ability to repay. If the year-end is a time when creditors fulfill their financial obligations and prepare for the new year, so are the borrowers. This will affect the borrower’s ability to repay. Therefore, it can be said that the year-end is not really a good time for creditors to conduct debts collection.

2. What time of the year is most reasonable for creditors to collect debts?

As mentioned above, in the first quarter of the year, people often abstain from collecting debts at the beginning of the year. After the Tet holiday, creditors should not collect debts because borrowers spent money during the Tet holiday so they may have no money to repay. Therefore, the first quarter is not a suitable time for debts collection. Moreover, the beginning of the year is the time when most individuals and organizations start using money to invest and conduct business activities, so they may not have enough money to pay debts.

The creditors should start collecting debts in the second quarter of the year because at this point, the borrower’s business activities begin to be profitable, so it will be possible to repay debts. However, the amount of debts that collected in the second quarter may not much due to low profit. At this time, creditors should actively negotiate so that borrowers have time to arrange repayment.

The third quarter of the year is the “golden time” for creditors to collect debts because business activities in the third quarter are usually most stable and the profit generated is enough for borrowers to repay debts in a timely manner. In fact, collecting debts in the third quarter is also likely to be the highest success. Therefore, at this time, creditors should actively ask borrowers to repay debts.

In the fourth quarter of the year, creditors can collect debts easily if borrower’s business activities have good result at the end of the year. However, the year-end is the time when not only creditors but also borrowers have to pay amounts such as tax finalization, fulfill financial obligations and prepare for the new year. Whether creditors collect debts successfully or not depends on borrower’s solvency. So that in fact, the ability to collect debts in the fourth quarter is quite low.

From the above analysis, it can be concluded that the year-end is not the best time of the year for creditors to collect debts. The time when creditors should collect debts is the third quarter when borrowers are able to repay debts from profits in business and commercial activities. However, if creditors want to collect debts at the end of the year, this is quite the good time to prepare to collect debts for debts arising next year.

In case you have any legal problems of debts collection, please send us your information and case.

Best regards.

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Join Fanpage Dispute Settlement And Debt Collection to have more useful legal knowledge.

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Lawyer Nguyen Thanh Ha

Email: ha.nguyen@tntplaw.com

If enterprises do not pay wages, what do employees need to do?

Written by Phạm Huyền on 20 September, 2021. Posted in Luật Lao động.

Nowadays, the fact that enterprises pay wages to employees late still occurs quite commonly, especially in the end of the year when enterprises have to settle tax finalization and other financial obligations. This makes a big effect on employees’ life as they have to prepare for new year and their family but they are not paid wages. However, is late payment of wages legal? Are enterprises sanctioned for administrative violations of paying wages late? In case employees are paid wages late, what can they do? To protect legal rights of yourself as well as employees in general, this article will answer the above legal questions.

1. Late payment of wages is legal, isn’t it?

Pursuant to Article 96 of the Labor Code 2012 stipulating the principle of payment of wages, employees is paid directly, fully and in a timely manner. In special case the wages may not be paid in a timely manner, it must not be later than 01 month and the employer must pay employees an addition amount at least equal to the deposit interest rates by the State Bank of Vietnam announced at the time of payment.

Thus, the late payment of enterprises and failure to pay wages to employees is a violation of the Article 96 above. In addition, special cases the wages may not be paid in a timely manner which are prescribed in Clause 2 Article 24 of Decree 05/2015/ND-CP include natural disasters, fires or other force majeure reasons that employer have sought all the remedies but could not pay wages on time. Except from the above reasons, employers must pay wages to employees in a timely manner as in the labor contract.

2. What will enterprises be sanctioned for administrative violations of paying wages late?

Pursuant to Point a Clause 3 and Point a Clause 7 Article 13 of Decree 88/2015/ND-CP, the act of not paying wages on time will be subjected to a fine which is valued from VND 5,000,000 to VND 10,000,000 if enterprises do not pay wages to 1 to 10 employees and depending on the seriousness of the violation, the fine may be up to maximum of VND 50,000,000.

Besides the main sanctioning form of fine, enterprises are forced to pay full wages plus the interest on the late payment or underpayment of wages to employees based on the highest rate of the demand deposit interest which the state-owned commercial banks announced at the time of sanctioning for the above violation.

3. What can employees do when they are not paid wages on time?

Pursuant to Clause 1 Article 15, Article 20 and Article 23 of Decree 24/2018/ND-CP, in case employees are not paid wages on time, they can execute following steps:

• Step 1: Submit the complaint to the enterprise that employees are working in. The employer is the competent party to settle first-time complaints of employees.

• Step 2: In case the employer does not respond to the complaint after 30 days from the date employees submit the complaint or employees disagree with the employer’s complaint settlement result, employees will send the complaint to the Chief Inspector of the Department of Labor – Invalids and Social Affairs where the employer is headquartered.

Please kindly note that these are steps of making a complaint under provisions of laws. Therefore, if employees want to resolve a labor dispute about late payment of wages in accordance with the law, they should make a complaint according to the above steps.

4. Responsibility of employers for paying wages

According to the above-mentioned provisions, it can be seen that the employers’ late payment of wages is illegal and may be subjected to administrative sanctions. At that time, employers not only have to pay employees full wages but also pay an addition interest due to late payment and are fined from VND 5,000,000 to VND 50,000,000. Thus, enterprises should comply with the provisions of laws and pay full and timely wages to employees.

Above are the provisions of the law on late payment of wages as well as legal actions that employees may take when they are delayed in paying wages. In case you have any legal issues regarding labor disputes, please provide us with your information and issue.

Best regards.

You may need Legal service of debt collection in labor sector.

Join Fanpage Dispute Settlement And Debt Collection to have more useful legal knowledge.

TNTP & Associates International Law Firm

Lawyer Nguyen Thanh Ha

Email: ha.nguyen@tntplaw.com

Author: Phạm Huyền

1. The exact address and legal status of the debtor cannot be determined

2. Language barriers

3. When the content of the signed contract between the parties stipulates authority settling dispute in a foreign country

4. It is very expensive to conduct a lawsuit abroad

1. Who are the authorized party and the authorizing party?

2. Contents in Power of Attorney

3. How to submit the Power of Attorney to the Court?

Before entering into a Contract

While entering into a Contract

During the performance of the Contract

After the debt arises

1. The psychology of reluctant to conduct legal proceedings of Aggrieved Party

2. Solution for the Aggrieved Party

1. Force Majeure and its legal consequence

(i) An event which occurs in an objective manner;

(ii) An event which is not able to be foreseen; and

(iii) The affected party is irreparable despite all possible necessary and admissible measures being taken.

2. The Covid-19 epidemic from the legal perspective and the application of Force Majeure in reality

(i) Businesses that are not affected by Covid-19

(ii) Businesses that are affected by Covid-19

1. What is the time when the debt arises?

2. Since the debt arose, what time should creditors collect the debt?

1. Collecting debts at the end of the year is really effective and reasonable, isn’t it?

2. What time of the year is most reasonable for creditors to collect debts?

1. Late payment of wages is legal, isn’t it?

2. What will enterprises be sanctioned for administrative violations of paying wages late?

3. What can employees do when they are not paid wages on time?

4. Responsibility of employers for paying wages

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