The debts of a business can arise from various entities in their business activities. However, the two main entities that may give rise to debts are individuals and legal entities. Distinguishing the characteristics of these two entities will help businesses come up with an appropriate debt collection plan. In this article, TNTP’s lawyer will present the differences between debt collection from businesses and debt collection from individuals.

1. Scale of debt

Business activities between companies often require larger capital and scale to meet the needs of business operations. Depending on each business field, contracts between businesses can range in value from a few hundred million to tens of billions of Vietnamese dong. Therefore, debts arising from contracts between businesses will also have a very large scale.

In contrast, transactions between individuals and businesses are usually related to equity participation or small retail sales, so the amount of capital contributed compared to businesses will be much smaller. Therefore, debts between businesses and individuals can range from several tens of millions to a few hundred million Vietnamese dongs.

2. The object of debt creation

For business debts, the object will be businesses that have business activities and are established under the provisions of the law. These businesses may be domestic or foreign with different scales. These businesses often have a clear operating address, operate as legal entities, act on behalf of themselves to conduct business activities, and are responsible for their assets. Debt collection with business entities is usually easier because creditors can easily look up information about the debtor business to carry out necessary activities.

For personal debts, individuals can be Vietnamese or foreign, living in Vietnam or abroad. Because the creditors are individuals, determining their personal information or address is often very difficult to access because such information is not publicly available and is strictly controlled by the police, leading to difficulties in carrying out debt collection measures.

3. Legal measures that can be applied

For debts owed by businesses, arising from contractual agreements within the civil sector, the business can negotiate payment through email, phone, or sending a request for payment letter. If the debtor does not cooperate, the creditor can file a civil lawsuit with the competent dispute resolution authorities to demand payment. Once a verdict, decision, or judgment has been issued by the dispute resolution authorities, the creditor can file a request for enforcement to the competent civil enforcement agency to take necessary measures to force the debtor to pay.

For individual debtors, the creditor can still perform all debt collection and civil lawsuit filing procedures as with debt collection from businesses. However, if it is determined that the debtor has committed fraudulent acts in the transaction, meeting the criminal offense conditions of asset misappropriation fraud or fraudulent acts, the creditor can send a complaint letter to the competent police investigation agency to initiate an investigation process. If there is enough evidence to verify the criminal behavior of the subject, the competent police investigation agency will initiate criminal proceedings, pursue, prosecute, and impose sanctions on the individual debtor according to the provisions of the law and compensate the business for damages.

Above is an article on the ” Difference between corporate debt collection and personal debt collection” by TNTP lawyer. Hopefully, this article is useful in the business operation process.

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