Disputes and Dispute Resolution on Loan Security by Debt Collection Rights at Credit Institutions

If the due date of a debt claim occurs after the due date of the obligation secured by that debt claim, the Mortgagee is entitled to request the party with the debt payment obligation to pay that debt to it at the time the debt payment obligation becomes due.

The mortgagee shall not require the mortgagor to pay when the debt obligation has not yet come due, unless otherwise agreed.

From the above analysis, it can be seen that the current regulations of Vietnamese law on mortgage of debt claims only stop at general principles, not thoroughly resolving the different aspects of this measure. Therefore, when accepting mortgage of debt claims, credit institutions need to pay special attention: Must specifically and clearly identify the type of debt claim accepted as mortgage; Must have sufficient legal basis to prove the right to request the obligated party to repay the debt; Clearly agree on the scope of the obligation to provide information upon request of the obligated party to avoid the case where the obligated party uses excuses to refuse to perform the debt repayment obligation; Proactively register mortgage of debt claims to be given priority in payment when handling secured assets that are debt claims.

2.6.4. Seizing secured assets is the right to claim debt

Current law has not yet regulated the method of carrying out the attachment of assets that are debt claims. In fact, although Clause 5, Article 71 of the 2008 Law on Civil Judgment Enforcement stipulates that compulsory measures for enforcement of judgments can be taken to force the transfer of property rights, this legal document only mentions the method of attachment of intellectual property rights [28, Articles 84 to 86], attachment of land use rights [28, Articles 89, Articles 110 to 113], attachment of capital contributions [28, Article 92] and attachment (deduction) of money in accounts [28, Article 76]. That means there is still a lack of legal mechanism for the attachment of debt claims except for the attachment of bank account balances. This is still a legal gap that needs to be overcome.

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According to the provisions of Clause 4, Article 4, Decree No. 163, in the case of a secured transaction that is legally entered into and has legal value with a third party, the Court or other competent State agency shall not be allowed to seize the secured property to perform other obligations of the guarantor, unless otherwise provided by law. Thus, in principle, after signing, the Mortgagee should immediately register the mortgage transaction of debt claims at the Transaction Registration Center, assets to prevent any intention to seize assets that are mortgaged debt claims. The law on enforcement of judgments sets out an exception related to the seizure of mortgaged assets. That is, the seizure can be carried out in the case where the Mortgagee is the person subject to enforcement and has no other assets other than the mortgaged assets or has assets but not enough to enforce the judgment, and the value of the mortgaged assets is greater than the value of the secured obligation and the cost of enforcement of the judgment. However, in this case, when handling the seized property, the mortgagee has priority in payment after deducting the costs of execution [28, Clause 3, Article 47 and Article 90]. In other words, in all cases, the interests of the mortgagee are still placed before the interests of the seizing creditor.

2.7. Disputes and dispute resolution regarding loan security by debt collection rights at credit institutions

Securing loans with the right to claim debt at a credit institution is one of the important measures to ensure the borrower's debt repayment obligation to the credit institution. If the loan collateral with the right to claim debt at a credit institution is implemented under too strict conditions and procedures, it will help the credit institution "feel secure" in recovering the loan capital, but the lending efficiency will be low, and it will also affect the interests of the borrower and the guarantor. On the contrary, if this measure is implemented too loosely and the procedures are too easy, the borrower will have many opportunities to "access" the loan capital, but the lending activities will be too difficult.

of credit institutions easily cause risks and capital losses when credit institutions do not have enough basis or are weak in handling debt collection rights to recover debts, the cause of which comes from the fact that credit institutions are too "lenient" in the process of accepting debt collection rights as collateral. Therefore, the law on loan security by debt collection rights at credit institutions in Vietnam must have provisions suitable to reality, must "harmonize" the interests of the parties in the relationship of loan security by debt collection rights at credit institutions. The law must achieve the goal of promoting the development of lending activities secured by debt collection rights at credit institutions, but must still ensure safety in the operations of credit institutions and ensure the rights of borrowers in borrowing capital, the rights and legitimate interests of the guarantor when using debt collection rights as collateral.

Credit institutions often apply all measures to resolve disputes including negotiation, conciliation, arbitration and court, in which negotiation and court are the main ones. Conciliation is almost never applied, because of the nature of this type of dispute, the mediator has little role. Arbitration is rarely applied, because the parties do not have an arbitration agreement.

Credit institutions are not enthusiastic about choosing the Commercial Arbitration Agency as the agency to resolve credit disputes in general, disputes related to security contracts, and handling of secured assets in particular, because the Court has a system of other supporting agencies such as the police, the Procuracy, the People's Committee, etc.

Credit institutions usually have a post-lending control process and a debt collection process. Accordingly, when the borrower has received debt reminder letters, the debt collection departments will work with the customer... when working with the customer many times without results, then the measure of filing a lawsuit will be applied. Therefore, at this stage, the borrower often shows signs of procrastination, lack of goodwill, even absconding... so the credit institution must apply the measure of filing a lawsuit at the Court, waiting for the judgment/decision of successful mediation, the credit institution will request the Enforcement Agency to auction the property.

Arbitration has no enforcement support agency and in the subconscious of most people, Arbitration is not as “scary” as the Court. Therefore, sometimes, debt collection only needs a court order to be sent back, and the borrower will seriously pay the debt to the credit institution instead of making empty promises like in previous negotiations.

Negotiation is the most effective method at all stages. However, a large proportion of cases fail to achieve results, and are forced to go to court, although the time to resolve the case in court is often very long, costly and complicated. And if a lawsuit has to be filed in court, it is often necessary to wait for the civil judgment enforcement stage, which is also very time-consuming, costly and troublesome. Normally, a case of handling secured assets in this order lasts for several years. That is also an important cause leading to the increase in bad debt in the economy in general and in banks in particular.

Chapter 3

SOME DIRECTIONS AND COMPLETE SOLUTIONS

LAW ON LOAN SECURITY BY DEBT CLAIM RIGHTS AT CREDIT INSTITUTIONS IN VIETNAM

Securing loans with debt collection rights, from the perspective of lending activities of credit institutions, is a measure applied to limit risks for credit institutions, thereby contributing to bringing capital to those in need of capital and promoting economic development. However, the law on securing loans with debt collection rights at credit institutions in Vietnam is currently only general and unsynchronized regulations, ... The current state of the law and the application of the law on securing loans with debt collection rights at credit institutions in Vietnam has raised the urgent need to improve the law.

3.1. Requirements for perfecting the law on loan security by debt collection rights at credit institutions in Vietnam

Perfecting the legal system on loan security with debt collection rights to create a safe legal corridor for credit institutions to confidently accept collateral as debt collection rights, ensuring the legitimate interests of credit institutions and borrowers. The requirements for perfecting the law on loan security with debt collection rights at credit institutions in Vietnam should be based on the following basic requirements:

- The improvement of the law must come from the intrinsic requirements of the loan security relationship with debt collection rights at credit institutions in Vietnam;

- The improvement of the law must be based on the requirements of international economic integration in the banking and finance sector of Vietnam.

First of all, it is necessary to rely on the internal requirements of the loan security relationship with debt collection rights at credit institutions in Vietnam.

Currently, Vietnam is strongly integrating into the international economy in a developing market economy, the issue of creating a complete legal corridor to regulate the relationship of loan security by debt collection rights at credit institutions in Vietnam and protecting the rights and legitimate interests of the parties involved in this relationship is becoming more urgent. Therefore, understanding the characteristics of the formation and development of Vietnam's market economy is important in determining the direction of legal improvement.

All activities of building and perfecting the law must be based on practice, aiming to apply in practice. Therefore, the building, amending, supplementing and perfecting of the law on property rights in general and debt collection rights in particular as well as the loan security by debt collection rights at credit institutions in Vietnam in particular must originate from the practice of civil security relations and loan security relations by debt collection rights at credit institutions in Vietnam, originating from the practice of civil security relations and debt collection rights at credit institutions in Vietnam.

arising from the need to protect the legitimate rights and interests of the parties involved in these relationships.

In the context of an increasingly complex economic development, the banking and finance sector plays an important role in regulating the supply of capital to the market. Ensuring the safety of credit institutions' operations is a central and urgent task. To do this, the law must first create a legal corridor that is both safe and convenient for the operations of credit institutions.

Faced with the intrinsic requirements of the loan security relationship by debt collection rights at credit institutions in Vietnam, many legal regulations on this issue are not complete and consistent. Therefore, the amendment, supplementation and improvement of the law must ensure completeness, consistency and consistency and the law must be easy to understand and apply in practice to ensure the harmonious protection of the rights and interests of the State, credit institutions and borrowers.

Second, on the requirements of international economic integration in the banking and finance sector of Vietnam.

Increasingly deep integration into international economic activities requires Vietnamese law to be appropriate and compatible with the laws of countries in the region and the world, especially with bilateral and multilateral commitments, creating conditions for Vietnam to participate in the international "common playground".

To meet this requirement, in the process of perfecting the law, the law must inherit and promote progressive legal provisions that are consistent with reality. In addition, it is necessary to acknowledge and develop new regulations that are consistent with the practical situation of credit institutions in particular and the socio-economic life in Vietnam in general on the basis of research and learning from progressive legislative experiences of countries in the region and around the world. The law must have

Many regulations are built on the basis of international legal standards. This is a difficult goal for lawmakers and policy makers in the current period.

3.2. Directions for perfecting the law on loan security by debt collection rights at credit institutions in Vietnam

Based on the above legal improvement requirements, the thesis proposes directions to improve the legal system on loan security by debt collection rights at credit institutions in Vietnam as follows:

First , perfecting the regulations on property rights. Up to now, the concept of property rights is still vague, even in the legal community, not everyone clearly understands property rights. Because the right to claim debt is a property right, to understand the right to claim debt, we need to start from the most basic thing: property rights.

Second , perfecting regulations on loan security by debt collection rights at credit institutions in Vietnam to create a complete, synchronous, and unified legal basis for the relationship of loan security by debt collection rights at credit institutions in Vietnam to operate smoothly, safely, and in accordance with reality.

Third , perfecting the law on loan security by debt collection rights to create a legal basis to ensure the safe operation of credit institutions, protect the rights of borrowers, raise awareness of the parties in respecting each other's legitimate rights and interests and properly and fully performing their obligations. Thereby promoting the sustainable development of credit institutions' lending activities, contributing to the transparency of the financial market, thereby, borrowers can easily access loan capital for investment, business, and life.

Fourth , perfecting the legal system on loan security by debt collection rights at credit institutions along with criminal, civil, civil procedure and administrative laws, and going hand in hand with establishing guidance and coordination mechanisms between credit institutions and entities related to loan security transactions.

by debt collection rights, monitoring mechanisms, ensuring the implementation of regulations on loan security by debt collection rights in practice.

It can be seen that the above directions are the basis and premise for perfecting the law on loan security by debt collection rights at credit institutions. These directions will only be truly effective if they are harmoniously and scientifically combined with the basic principles of perfecting the law. Building a complete legal framework to regulate loan security relationships by debt collection rights poses many specific requirements.

3.3. Some recommendations for improving the law on loan security by debt collection rights at credit institutions in Vietnam

The limitations and shortcomings in the provisions of the law on securing loans by debt collection rights at credit institutions in Vietnam are still barriers to the economy. Many issues regarding determining what is a debt collection right to be accepted as collateral, the conditions for debt collection rights to be used as collateral, the process of accepting debt collection rights, issues on management and handling of debt collection rights as well as the mechanism and authority to resolve disputes over securing loans by debt collection rights at credit institutions are still not uniformly regulated by civil law, unclear or "open", causing difficulties in applying the law in practice.

Through the study of theoretical and practical issues of applying the law on loan security measures by debt collection rights at credit institutions, the thesis has some recommendations and proposes the following solutions to contribute to perfecting the legal system on loan security by debt collection rights at credit institutions in Vietnam, specifically as follows:

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