LAWFUL DEBT RECOVERY IN VIETNAM: A STRATEGIC LEGAL APPROACH FOR EFFECTIVE ENFORCEMENT

Situation

In business practice, overdue debts are a common and recurring issue. Many companies encounter situations where:

• The debt is supported by valid contracts and documentation
• Multiple payment requests have been made without success
• Legal action has been initiated, yet no actual recovery has been achieved

In such cases, the challenge does not lie in establishing the debtor’s obligation, but rather in the absence of a proper legal process and enforcement strategy.

Therefore, adopting a lawful, structured, and strategic approach to debt recovery is essential to achieving effective and sustainable results.

Legal Framework

Debt recovery and enforcement in Vietnam are primarily governed by the following legal instruments:

• Civil Code 2015 – governing contractual obligations and civil liabilities
• Civil Procedure Code 2015 – governing court procedures and dispute resolution
• Law on Civil Judgment Enforcement 2008 (as amended), and the Law on Civil Judgment Enforcement 2025 (effective from July 1, 2026) – governing the enforcement of legally effective judgments and decisions

In addition, any acts involving harassment, coercion, or unlawful pressure during the debt recovery process may give rise to administrative or criminal liability, thereby exposing creditors to significant legal risks.

Analysis

1. Debt recovery is a legal process, not merely debt collection

A common misconception is to equate “debt recovery” with informal or aggressive collection practices.

In reality:

• Improper pressure may trigger additional disputes
• Unlawful measures do not increase recovery effectiveness
• Creditors themselves may face legal consequences

A proper approach should be understood as:

The application of lawful legal instruments to protect and enforce the creditor’s rights in practice

2. Key stages in lawful debt recovery

Stage 1: Legal review and assessment

• Verification of contractual validity and supporting documentation
• Identification of the legal nature of the obligation
• Assessment of actual recovery feasibility

This stage determines:

• Whether recovery action should be pursued
• What strategy is appropriate

Stage 2: Strategy development and implementation

Depending on the specific case, actions may include:

• Issuing formal legal demand letters
• Conducting structured negotiations under legal supervision
• Preparing documentation for potential litigation

Objectives:

• Apply lawful legal pressure
• Maximize recovery potential without immediate litigation (where feasible)

Stage 3: Litigation and enforcement

Where negotiation fails:

• Filing a lawsuit before the competent court
• Applying interim measures (where legally justified)
• Monitoring and coordinating enforcement procedures

It is important to note:

A court judgment is not the final outcome, but the legal basis for enforcement

3. Critical factor: Enforceability of judgment

In many cases, businesses:

• Obtain favorable judgments
• Secure legal recognition of their claims

Yet fail to recover funds due to:

• Lack of asset verification at an early stage
• Asset dissipation by the debtor
• Ineffective enforcement follow-up

Therefore, an effective debt recovery strategy must focus on:

Actual enforceability, not merely legal success on paper

4. HT Legal VN’s approach

HT Legal VN adopts a structured and comprehensive approach to debt recovery:

• Early-stage legal assessment of each case
• Tailored strategy based on the nature of the debt and the debtor’s situation
• Flexible combination of negotiation and litigation
• Close monitoring from pre-litigation through enforcement

The objective is not limited to dispute resolution, but extends to:

The effective realization of creditors’ rights in practice

Recommendations

To improve debt recovery outcomes, businesses should:

• Avoid informal or unlawful debt collection practices
• Conduct thorough legal and asset assessments before initiating legal action
• Engage legal professionals with practical experience in debt recovery
• Closely monitor enforcement proceedings after obtaining a judgment

A proper approach from the outset helps:

• Reduce unnecessary costs
• Mitigate legal risks
• Increase actual recovery rates

Conclusion

Debt recovery is a process that requires the combination of:

• A solid legal foundation
• A structured procedure
• A well-defined strategy

Debt itself is not the primary risk. The real risk lies in improper handling of the recovery process.

A sound legal strategy not only enables recovery but also protects businesses from potential legal exposure.