DIFFICULTIES IN DEBT RECOVERY FOR CREDIT INSTITUTIONS

In cases where debt recovery methods are ineffective, credit institutions can initiate a lawsuit against the borrower in court. However, difficulties in debt recovery in some cases are unavoidable.

Determining the Court’s competence to consider and settle cases

The Courts have very different understandings about the determination of the jurisdiction to consider and resolve the case.

There is a number of courts respecting the parties’ agreements as agreed in credit contracts, financial contracts, creating conditions for credit institutions to focus on handling cases smoothly and accepting the agreed contents to select the Court where the credit institution’s head office is located, branches and transaction offices of the credit institution. However, there are cases where the Court does not accept that it must be the Court where the mortgaged property is located or the defendant’s permanent residence.

The court cannot serve the documents on the client, the defendant, and the person related to the case

The Court must issue a decision to return the petition to the credit institution because the defendant deliberately shirked, did not cooperate or terminated the case because it deems that the lawsuit is not yet eligible. Meanwhile, all rights and obligations of the related parties have been agreed in great detail in credit contracts, financial contracts and other agreement documents.

Moreover, collateral still exists in reality but the Court still returns the lawsuit petition, suspends the case for the reasons of not summoning the defendant, the client, and the person involved. This is one of the main factors causing delays in the proceedings when the credit institution sues customers or mortgages.

The promulgation of documents guiding a number of fields has not been implemented in a timely and effective manner

Resolution No. 42/2017/QH14 on piloting the handling of bad debts of credit institutions is the highest legal basis, demonstrating the determination of the legislature and the law enforcement agency in releasing Huge guarantee assets of outstanding bad debt. However, legal agencies and state management agencies have not promptly issued documents guiding a number of areas under their management responsibilities, significantly affecting implementation efficiency of such resolution.

Resolution No.03/2018/NQ-HDTP guiding the application of a number of legal provisions in resolving disputes on handling bad debts, collateral of bad debts in people’s courts, has not yet focused The main problem point is disputes related to the security property arising from the time the secured party initiates a lawsuit or requests for judgment enforcement. It is the dispute over collateral in the lawsuit and judgment execution phase that froze hundreds of trillion dong of collateral and made bad debts in Vietnam increasingly high.

The Court’s resolution of the case was prolonged

Noncooperation of the defendant and the person with related interests and obligations in this case will make the resolution of the Court case prolonged. The Court must verify and post up procedural documents according to the provisions of the Civil Procedure Code in order to hear them in their absence.

In addition, a defendant also authorizes a lawyer to participate in the proceedings with the aim of extending the time limit to resolve the case as long as possible (suggest collecting more documents, evidence, conducting solicitation of expertise document…). For complicated cases with many people with related interests and obligations, the trial postponement of the trial many times is unavoidable, causing frustration for credit institutions to participate in the proceedings.

Procedure time

According to the Code of Civil Procedure 2015, for civil cases and commercial business disputes related to credit contracts, the trial preparation time limit is 2 months from the date of acceptance of the cases. For complicated cases, the Chief Justice of the Court may extend the trial preparation time limit for no more than 2 months). be tried in accordance with the Code of Civil Procedure.

>> LAWFUL DEBT RECOVERY VIA PHONE BY FINANCE COMPANIES https://linconlaw.vn/lawful-debt-recovery-via-phone-by-finance-companies/

>> POPULAR METHODS OF DEBT RECOVERY https://linconlaw.vn/popular-methods-of-debt-recovery/