What to do when the debtor has conditions but does not pay the debt?
One of the problems that make businesses “headache” during the process of debt collection is when the debtor has enough conditions but ignores or does not pay the debt. What should the creditor do to protect their legal rights and interests? In the following article, TNTP will provide an overview of what the creditor can do when the debtor has conditions but does not pay the debt.
1. In case the debtor is an individual
If lending money, or assets between a business and an individual is a civil transaction that is not contrary to the law, then if the debtor does not have a good faith attitude towards payment when due, even if they have enough conditions, the business can consider filing a lawsuit at the competent dispute resolution authority such as the Court or the Commercial Arbitration Center to request these agencies to settle according to the provisions of the law. After the case has been resolved and the business has received a Judgment/Verdict/Decision from the Court or the Commercial Arbitration Center, they can proceed to submit an Application for enforcement of the judgment to the Civil Enforcement Agency with jurisdiction to apply legal measures to compel the debtor to perform their debt payment obligation.
In addition, in the case of an individual borrower who has enough financial capacity but intentionally does not pay the debt, they may also be prosecuted for the crime of Misappropriation of Property under Article 175 of the Criminal Code. According to the provisions of the Criminal Code, if someone borrows, or rents property but intentionally does not pay money or property at the agreed repayment deadline, this may be considered fraudulent behavior and depending on the degree of severity may be subject to criminal prosecution.
Thus, if the business encounters the situation of an individual debtor not paying the debt even when they have enough conditions as described above, they can consider filing a civil lawsuit against the competent dispute resolution authority. In case the business believes that the case may be serious, they can submit a Report of crime denunciation to the competent police investigation agency to report on the criminal act of the perpetrator.
When receiving the report of crime denunciation, the police investigation agency will conduct an investigation. If there is enough evidence to determine that an individual or legal entity has committed a crime as provided by the Criminal Code, the investigation agency will decide to initiate a criminal case and initiate prosecution of the accused. The investigation, prosecution, and trial of the criminal case will be conducted according to the provisions of the law.
2. If the debtor is a legal entity
According to the provisions of the Criminal Code, the crime of Abuse of Trust for misappropriating property as stipulated in Article 175 of the Criminal Code only applies to individuals. Therefore, in the case where the debt arises from an agreement/contract between two legal entities and the debtor does not cooperate to pay the debt despite having the ability and conditions to do so, the business can only file a lawsuit against the competent authorities to resolve the dispute and request a settlement under the provisions of the law.
In this case, when filing a lawsuit to the competent authorities to resolve the dispute, the business needs to submit a Petition for Filing Lawsuit clearly stating the demand for the debtor to pay the debt, along with the documents and evidence proving their claim, such as the Contract/agreement; Debt reconciliation document; Invoice; Payment confirmation,… If the documents and evidence provided by the business meet the conditions for accepting the case, the dispute resolution agency will proceed to resolve the case and issue a legally effective Judgment/Verdict/Decision (if not appealed or protested).
After obtaining a legally effective Judgment/Verdict/Decision, the business can submit a Petition for Enforcement of Judgment to the competent enforcement agency. At that point, the enforcement agency will use state power to take enforcement measures such as sealing the debtor’s property, and bank accounts if the debtor does not fulfill the obligation to enforce the judgment under the provisions of the law; compulsory seizure of property, accounts, and restrictions on leaving the country for those who have an obligation to ensure the enforcement of the judgment,… Then, the debtor’s obligation to pay the debt to the business will be ensured to be carried out under the provisions of the law.
Above is the article on the topic: “What to do when the debtor has conditions but does not pay the debt?” by TNTP. Hopefully, this article is useful in the activities of businesses.