Author: TNTP LAW

Currently, it can be observed that many associations and groups on social media engage in behaviors that lure and guide numerous individuals into indebtedness with financial companies, attracting hundreds to thousands of members. What legal risks and dangers does this behavior entail? In this article, TNTP’s lawyers will provide their perspective on the question: “How will paying off debt with a Financial company be held accountable under the law?”

1. Behavior of getting into debt with financial companies

According to legal regulations, financial companies are non-banking credit institutions, and they function to lend, including installment loans and bank overdrafts. Thus, the lending services of financial companies are legally permitted activities and must be carried out by legal provisions.

Getting into debt with financial companies involves borrowers exploiting the simplified loan application process of these financial companies through online platforms, apps, or by submitting loan applications with simple authentication conditions, such as only requiring a phone number or national identification card. Deceptive acts aimed at misappropriating borrowed funds from financial companies may range from simple actions like providing phone numbers from disposable SIM cards or intentionally providing misleading information to meet the requirements for completing loan applications to sophisticated and complex acts such as forging documents and national identification cards to deceive artificial intelligence-based lending app systems. Many individuals have successfully executed these behaviors, spreading rapidly on social media and even being viewed by some as a quick way to make money, causing significant public concern.

2. Negative Impact on Financial Companies and Social Order

The increasing trend of getting into debt has serious implications for the lending activities of financial companies. Many individuals fail to distinguish between the legitimate lending activities of financial companies and the illicit lending activities of black-market credit organizations, leading to intentional indebtedness. Additionally, the proliferation of consumer loan apps impersonating financial companies has skewed perceptions, causing many people to view legitimate financial companies negatively and impacting the reputation and lawful business operations of the financial system, which, in essence, contributes significantly to societal benefits.

The growing activities of debt-inducing associations pose risks to financial companies as they struggle to recover the lent funds. This directly affects the business growth and revenue of financial companies. In turn, this situation may lead many individuals facing financial difficulties to be unable to access capital from legitimate financial companies, increasing the likelihood of resorting to the services of black-market lenders with exorbitant interest rates. These illicit operations not only contribute to the erosion of social order and safety but also pose a threat to individuals’ financial well-being.

3. Legal Risks in Getting into Debt

a) Criminal Law Violations

In cases of legal violations, as stipulated in the Penal Code, the act of using deceptive behavior to obtain property or creating conditions for debt repayment but failing to repay may constitute the offense of Misappropriation of Property under Article 175 of the 2015 Penal Code. The penalty for this offense ranges from 6 months to 20 years in prison, depending on the amount borrowed.

Therefore, when borrowers lack the means to repay the loan at the time of borrowing but still provide false information to financial companies to receive the loan, it may also constitute the offense of Fraudulent Misappropriation of Property due to the deceptive declarations made.

Moreover, individuals who intentionally evade repayment, provide false information, or forge documents to avoid fulfilling their repayment obligations can be considered as engaging in deceptive behavior to misappropriate property. Additionally, those who establish groups on social media to “share” methods of getting into debt may violate the law and be subject to fines ranging from 10,000,000 to 20,000,000 VND for the offense of Aiding and Abetting under Article 17 of the Penal Code, as they encourage and assist others in committing crimes.

b) Civil Dispute Cases

In situations where borrowers do not engage in deceptive practices to get into debt but are unable to repay due to financial conditions, it does not constitute criminal offenses. However, it may give rise to civil legal disputes for the borrower.

In such cases, financial companies may file lawsuits against borrowers for failing to fulfill their repayment obligations as per the loan agreement, affecting the rights of the lending party. The dispute resolution authority, such as the court, will then proceed with legal procedures to issue a Judgment/Decision compelling the borrower to fulfill their repayment obligations.

After the Judgment/Decision becomes legally effective, the authorized enforcement agency will carry out the enforcement phase, during which coercive measures will be applied to the debtor under legal regulations until the repayment obligations are fully met.

From the above content, it can be seen that engaging in getting into debt can lead to civil disputes or even criminal prosecution. Therefore, individuals need to be aware of legal compliance and adhere to civil transactions to ensure social order and their interests.

The above is an article by TNTP’s lawyers on the topic: ” How will paying off debt with a financial company be held accountable under the law”. Hopefully this article provides value to the readers.

Sincerely,

Delayed and incorrect payments by business partners are common challenges in business operations. In such cases, what should businesses do to protect their rights? In the following article, TNTP’s lawyers will provide insights into what businesses should do when dealing with partners who delay payments.

1. Negotiate and Request Payment from the Debtor

When a business partner delay payments, the business must take action to ensure the partner is aware and fulfills their payment obligations. In such situations, the business should regularly communicate with the partner, proposing payment solutions and discussing possible adjustments to payment deadlines to reach an agreement that best ensures the interests of both parties.

The negotiation process involves a variety of tasks, including making phone calls, holding face-to-face meetings, or sending formal written requests to the debtor who is delay payments. These actions may need to be carried out repeatedly or on a scheduled basis, depending on the value of the debt and the relationship between the business and the partner, to ensure effective resolution.
Negotiating and requesting payment also serves the purpose of gauging the debtor’s willingness to cooperate. If the debtor demonstrates an uncooperative attitude, continues to be evasive, or provides no feedback regarding the repayment, the business should consider initiating legal proceedings to safeguard its rights.

2. Initiate a Debt Recovery Lawsuit

Initiating a lawsuit becomes necessary when a business determines that the debtor has the financial capacity to make payments but is unwilling to do so. To file a lawsuit, the business needs to submit a legal complaint to the authorized dispute resolution agencies, requesting these bodies to compel the delinquent partner to settle the outstanding debt by legal regulations.

The choice of the dispute resolution agency depends on the content of the contract/agreement between the business and the partner. If the contract/agreement specifies the selection of a commercial arbitration center for dispute resolution, the business must submit the legal complaint to the competent Commercial Arbitration Center. Conversely, if the parties do not agree on choosing an arbitration center in the contract/agreement, the business will file a legal complaint with the competent court for dispute resolution.

After reviewing the legal complaint and the documents and evidence submitted by the business, the dispute resolution agencies may issue a Verdict/Decision or an effective Legal Ruling. This Verdict/Decision or Legal Ruling can be enforced by the competent enforcement agency, and in doing so, the enforcement agency will use the state’s authority to take necessary measures to compel the partner to fulfill payment obligations, as well as any other relevant obligations as stipulated by the law.

3. Requesting Bankruptcy Proceedings

This is a measure similar to filing a lawsuit with dispute resolution agencies; however, the fundamental difference is that the partner may be declared bankrupt, and all of the partner’s assets may be sequestered and liquidated to fulfill the debt obligations owed to the business.
According to Article 5, Section 1 of the 2014 Bankruptcy Law, concerning the party entitled to submit a petition to initiate bankruptcy proceedings, an unsecured creditor or a partially secured creditor has the right to file a petition for bankruptcy proceedings when three months have passed since the due date of the debt, and the business or cooperative has failed to meet its payment obligations.

Therefore, if the partner does not cooperate in making payments after the three-month period from the due date of the debt has elapsed, the business, as the creditor, can file a petition with the competent court to initiate bankruptcy proceedings against this partner. After the court accepts and issues a decision to commence bankruptcy proceedings, the judge and the trustee in charge of the case will take necessary measures to manage and liquidate the partner’s assets and distribute the remaining assets to the business, as well as fulfill other obligations that the business has not yet met, such as tax obligations, salary debts, social insurance, or other financial obligations to government agencies.

From the above content, it can be seen that businesses have various options to resolve debts with partners, depending on their purpose and implementation capabilities. Businesses can consider choosing the appropriate measures to safeguard their interests.

The above represents the perspective of TNTP lawyers on the topic: “What Businesses Should Do If Partners Delay Payments.” It is hoped that this article brings benefits to the operations of businesses.

Sincerely,

The business activities of enterprises, as well as organizations, always require unified and clear management to achieve the set business goals. However, there is a crucial activity within business operations that also needs attention, namely, managing debt. In this article, TNTP’s lawyers will provide insights into the significance of debt management activities and share experiences in managing debt within enterprises.

1. What is managing debt?

Management is the operation of directing, guiding, and overseeing activities to achieve predetermined goals. Similarly, in this context, debt management involves defining the goals of debt recovery and planning and managing the debt recovery activities of the enterprise to ensure its interests.
Many perspectives suggest that debt management and general management share similarities. However, debt management is just one phase of overall debt management because the entire debt management process extends from planning, directing, assigning, and overseeing debts in a unified and clear manner to achieve the established goals. In other words, debt management activities are necessary and equally important compared to the business management of the enterprise, both aiming to maintain profitability, cash flow, and stability in the enterprise’s operations.

2. Managing Debt Steps

a) Establishing Objectives

The clear and most important objective of debt management is to control, and limit bad debts, and ensure the efficient recovery of debts for the enterprise. Any outstanding debt becomes a financial burden for the business without proper organization, arrangement, and defined objectives for handling it effectively.

While the primary goal of debt recovery is to compel the debtor to make payments, there are also other equally important objectives, such as maintaining relationships with debtors to ensure ongoing operations even when debts arise. In such cases, the enterprise needs to classify debts based on different criteria to implement debt recovery according to the various objectives of the debt management process.

b) Debt Classification

As mentioned earlier, not all debts of the enterprise need to be rapidly recovered, as some debtors may be long-term partners or strategic allies. In such cases, maintaining and developing existing relationships with these debtors may be more important than swiftly recovering debts, which could lead to strained relationships. Therefore, for effective debt management, enterprises need to classify debts with specific objectives. For example, debtors with long outstanding debts and uncooperative payment history may be classified as bad debts. The objective for this group would be to recover debts through legally permissible means efficiently. On the other hand, debtors with whom the enterprise continues to engage in business, and the debts from this group represent an insignificant proportion compared to the profits generated, can be classified as noteworthy debts. In such cases, the enterprise may engage in discussions and negotiations to recover debts to maintain the relationship and serve as a “reminder” for debt payment.

c) Managing Debt Recovery Operations

Similar to any other business activity, debt recovery operations also need to be managed to ensure that all tasks are carried out reasonably, and legally, and bring the best benefits to the enterprise. Management is reflected in directing, organizing tasks, assigning responsibilities, and overseeing debt recovery activities to align with the established objectives. Without effective management, the debt recovery operations of the enterprise will be challenging to execute as the progress of the case and the tasks performed in debt recovery cannot be monitored. This can result in an inadequate quality of debt recovery, leading to the wastage of labor and financial resources of the enterprise without achieving the intended goals. Therefore, managing debt recovery operations is a crucial element of debt management.

The above is the article by TNTP’s lawyers on the topic: ” Experiences for managing debt within a business.” It is hoped that this article will provide value to the activities of businesses.

Best Regard.