Legal debt collection services

Bad debt has become one of the problems in today’s society. This comes from many different reasons: the borrower is unable to repay the debt, the borrower intentionally does not repay the debt and even evades the debt. Regardless of the cause, this directly affects the rights of the lender. Many individuals and organizations have chosen to use debt collection services at legal service providers to recover these debts. Through the following article, Viet An Law would like to share some content related to this legal service.

What is legal debt collection?

Debt collection is understood as the lender or an individual or organization authorized by the lender to take necessary measures to recover the loaned money, assets, and interest (if any). Put simply, debt collection is the lender exercising its right to claim debt according to the law. Although it is a legal right, it does not mean that the lender can exercise this right at any time.

According to Article 469 of the Civil Code 2015, the lender is entitled to exercise the right to claim or recover debt at the following times:

• For open-ended loans
  • No Interest: Anytime but with reasonable notice to the borrower
  • Interest: At any time but with reasonable notice to the borrower. In this case, the lender is paid interest until the asset is returned.
• For term loan agreements: Debt can only be recovered when due. If the debt is recovered before maturity, it must be agreed by the borrower.

Are debt collection services legal in Vietnam?

Legal debt collection service is one of the types of services provided by organizations and individuals in society. In this article, Viet An Law will focus on analyzing the debt collection services of legal service providers.

Debt collection service is one of the specific types of legal services. Accordingly, based on the request from clients, the units will provide legal services by applying legal regulations to support and help clients recover the money, assets that clients have lent, and interest (if any).

Many people still confuse legal debt collection services and illegal debt collection services. Although similar in that they both aim to help borrowers recover the money and assets they have lent, using legal debt collection services is completely different from illegal debt collection services.

• For legal debt collection services, legal service providers will apply measures permitted by law to request the borrower to fulfill the debt repayment obligation, thereby protecting the legitimate rights and interests of the lender. For example: sending a letter of notice requesting debt repayment, filing a lawsuit in court, etc.
• Meanwhile, a illegal debt collection service is when the lender hires another party to collect debt on their behalf. This service industry has many negative factors because many individuals and organizations use thuggish, “mafia” measures violating law to collect debt for borrowers, causing many serious consequences. Therefore, this business industry is currently prohibited by law.

Reasons to use legal debt collection services

Disputes over loan agreements are one of the most common disputes today and the main cause comes from the borrower not fulfilling the obligation to repay the debt according to the agreement such as late payment, insufficient payment, and even non-payment. In this case, debt collection is the right as well as a measure to protect the legitimate rights of the lender.

Currently, many individuals and organizations choose to use debt collection services of legal service providers for the following reasons:

Get advice on related legal issues

Although debt collection is a legal right of the lender, not everyone can exercise this right legally. Therefore, when using debt collection services of legal units, clients will be supported by lawyers and legal experts to advise on legal regulations related to debt collection. Afterward, clients can know the scope of debt collection rights or in other words, what can and cannot be done during the debt collection process.

Limit legal risks

In reality, there are many cases where lenders exceed the scope of their debt collection rights, manifested by applying unorthodox measures such as threats, hiring “gangsters”, and even causing damage to the property, life, and health of the borrower. As a result, many such cases have been prosecuted.

The reason for this is that the lender does not understand the legal regulations. Therefore, as mentioned above, when using debt collection services, clients will be advised on related legal issues and warned of legal risks. On that basis, clients can limit legal risks during the debt collection process.

Experienced in handling cases

Debt collection is not a simple matter, especially when the borrower does not have the conditions or ability to repay the debt, debt collection becomes even more difficult. There are even cases where even though a Judgment or Decision of Court is determining the borrower’s debt repayment obligation, it still cannot be enforced or the time for enforcement of the Judgment or Decision is prolonged (i.e., the debt cannot be recovered).

However, when using debt collection services from legal units, Lawyers and legal experts with rich experience in handling debt collection cases, know how to protect the maximum legal rights and interests of clients.

Tasks when performing debt collection services of Viet An Law

• Legal advice, and guidance on implementing legal measures to recover debt;
• Support drafting and sending documents and notices to borrowers and competent state agencies;
• Represent in negotiations with borrowers and related parties;
• services, debt collection through functional debt collection companies;
• Civil debt collection lawsuit;
• Representing in litigation to protect the legitimate rights and interests of Clients before Court and Arbitration or related alternative resolution dispute forms.

If you need to learn about or use debt collection services or consult on related legal issues, please contact Viet An Law for timely support.