POPULAR METHODS OF DEBT RECOVERY

Debts can arise from civil transactions or commercial contracts from many different reasons. For example: one of the parties violates contractual obligations; The parties do not agree on the acceptance of work performance results; One party has financial difficulties and is unable to pay; committing acts of deceit, lack of goodwill, honesty or fraudulent appropriation of property… In fact, there are many methods of debt recovery, however using illegal methods can be “counterproductive”, even negative consequences for people with debts that need to be collected.

1. Illegal methods of debt recovery

a. Illegally threatening debtors

Most borrowers feel worried, scared, and insecure when the debt is due and still cannot repay the debt. Just afraid of creditors asking for money, confiscating assets, lawsuits, worrying about losing reputation, honor, fear of public opinion… The creditor’s threat to sue, demand compensation for damages, fines for breach of contract… can motivate the borrower to repay the debt. However, using one of the following methods by creditor may be determined to be a violation to the laws:

– Threats of murder; 

– Threatening to commit acts of harming health or body;

– Threats of infringing upon privacy secrets: images, clips with sensitive content;

– Threats of extortion, rape of property…

b. Debt recovery via Facebook or other social platforms without full evidence

Debt recovery via social networks is a “hot” trend today. Many people have accused customers on Facebook as a popular method of debt recovery and luckily succeeded.

How to recover debt using Facebook? The creditor just needs to write a good debt collection status, accompanied by a picture of the debtor, loan papers… tag the debtor, their friends, and relatives.

Of course, no one prohibits creditors from using debt collection on Facebook, but it must be legal. The creditor must have enough evidence that the debtor owes money. If it is just fabricated information with no basis, the creditor may be prosecuted for slander and insulting the honor and reputation of others.

c. Arresting, detaining, holding, confining, beating, and confiscating the debtor’s assets

This is an illegal method of debt recovery. Even behavior like this can be enough to constitute a crime:

– Illegally detaining people;

– Conviction of property;

– Crime of humiliating other people;

– Crime of intentionally causing injury;

– Crime of robbery.

It is wrong for the borrower to not pay the debt, but many times it is just a civil dispute. Creditors in any case have no right to arrest, detain, beat, humiliate, or confiscate property to collect debt. If done, the creditor may be prosecuted for criminal liability for the corresponding crimes. At that time, the creditor becomes the offender, the debtor becomes the victim.

d. “Hiring” debt collection business organization

Debt collection service business is one of the prohibited activities according to the provisions of Investment law. However, in fact, this is still a commonly “trusted” unit due to its efficiency and speed.

These organizations operate debt collection activities very professionally, with clear assignment of functions, tasks and implementation plans. Some common debt collection methods include constant phone calls to pressure; threaten relatives; Direct threats to the borrower’s agency or home; even collage images and threaten with sensitive, untrue information…

Although quick for debts recovery, the above actions can seriously violate the law and have the opposite effect on the creditor as a “debt collector”.

>> CASES WHEN LAND USE RIGHTS ARE NOT PERMITTED TO TRANSFER https://linconlaw.vn/cases-when-land-use-rights-are-not-permitted-to-transfer/

>> EXTENSION OF LAND USE OUTSIDE HIGH-TECH ZONE, ECONOMIC ZONE, PROCEDURES FOR IMPLEMENTATION? https://linconlaw.vn/extension-of-land-use-outside-high-tech-zone-economic-zone-procedures-for-implementation/

2. Legal methods of debt recovery

a. Stretch banners for debt recovery

The law does not prohibit the display of banners for debt recovery, but attention should be paid to relevant regulations.

Typically, banners are stretched requiring project investors to repay debt. When creditors “are at the weak side” and can’t collect their debts, or the borrowers are inattentive and refuse to cooperate in repaying the debt, the creditors can put up banners for debt recovery. Borrowers who are afraid of losing their honor and reputation may decide to pay the debt.

This method of debt recovery, if it meets the regulations, can be determined to be legal. However, the ability to recover debt is low, with a lot of time, human resources and operators taken, contemporaneously attention need to be paid for avoiding affecting security and order and causing traffic obstructions.

b. Directly initiating lawsuits for debt recovery

Creditors have the right to initiate lawsuits for debt recovery complying with the prescribed procedures. The dispute resolution agency, including the Court or Arbitration, depending on each case, will receive documents and organize a hearing for disputes related to debt recovery.

However, creditors who initiate debt collection lawsuits themselves need to firmly grasp the relevant legal regulations. Leaky handling due to lack of legal knowledge can lead to:

– Opportunities for debtors to promptly disperse assets;

– The content of the lawsuit does not mention all debts and damages, the lawsuit is not for the right purpose;

– The debt collection process is long and costly;

– Impossibility in proving the debt…

c. Hiring consultants and units with functions, experience and reputation to support on debt recovery

This method of debt recovery can be one of the most optimal solutions for creditors to save time, costs and efficiency in the debt handling process. Units that can support include law firms; Organizations with legal debt handling functions according to regulations.

These are people who have legal knowledge and practical experience in:

– Consulting on measures and methods of debt collection in accordance with the law;

– Consulting and overall assessing principal debt, interest, fines according to contract/agreement, legal and reasonable compensation for damages;

– Recommending optimal solutions; Representing and representing creditors to negotiate with borrowers to recover debts;

– Consulting and supporting to prevent borrowers from dispersing assets;

– Advising creditors on conditions, procedures, and processes for initiating debt recovery lawsuits, drafting lawsuit petitions, and supporting creditors in the process of initiating debt recovery lawsuits;

– Advising and supporting creditors in working with judgment enforcement agencies in cases where after a Court decision has been issued but the debtor refuses to comply.

– Instruct creditors to file denunciations with law enforcement agencies if there are signs of crime by the debtor.

Noteworthy:

In fact, there are currently many units advertising debt recovery services (especially on social networking platforms), but in reality they can not meet the prescribed conditions or are only for the purpose of fraud and illegal profiteering. Finding and verifying accurate information about the support unit plays an equally important role than finding the optimal implementation plan.