How are administrative penalties applied if someone absconds without repaying debts despite having the ability to pay? Are there any criminal charges?
What are the obligations of the borrower in an asset loan contract?
Based on Article 463 of the Civil Code 2015, it is stipulated as follows:
Asset loan contract
An asset loan contract is an agreement between the parties, whereby the lender delivers the asset to the borrower; upon maturity, the borrower must return to the lender the asset of the same type in the correct quantity and quality and only be liable to pay interest if agreed upon or stipulated by law.
Additionally, according to Article 466 of the Civil Code 2015, the obligations of the borrower in an asset loan contract are as follows:
- The borrower of money must repay the full amount upon maturity; if the asset is an item, it must be returned of the same type in the correct quantity and quality, unless otherwise agreed upon.
- If the borrower cannot return the item, they can repay with money equivalent to the value of the borrowed item at the place and time of repayment, if agreed upon by the lender.
- The place of repayment is the residence or office of the lender unless otherwise agreed.
- If the loan is interest-free and the borrower does not repay or partially repay upon maturity, the lender has the right to request interest on the overdue amount according to the interest rate stipulated in clause 2 of Article 468 of the Civil Code 2015 for the period of late payment unless otherwise agreed or stipulated by law.
- If the loan has interest and the borrower does not repay or partially repays upon maturity, the borrower must pay interest as follows:
+ Interest on the principal according to the agreed-upon interest rate in the contract for the loan term until maturity; if late repayment, they must also pay interest at the rate stated in clause 2 of Article 468 of the Civil Code 2015;
+ Interest on the overdue principal not yet repaid at 150% of the agreed-upon interest rate for the overdue period unless otherwise agreed.
Failure to repay debt when capable: legal and criminal consequences
What are the administrative penalties for failing to repay debt even when capable?
Based on clause 1 of Article 15 of the Decree 144/2021/ND-CP, it is stipulated as follows:
Violations on causing property damage to organizations or individuals
1. A fine of 2,000,000 VND to 3,000,000 VND for any of the following behaviors:
a) Theft of property, intrusion into residential or storage areas, or other places managed by someone else with the intent to steal or misappropriate property;
b) Open theft of property;
c) Use deceit or abscond to misappropriate property or fail to return borrowed, leased, or contracted property despite having the capability to do so but intentionally does not return it;
d) Failure to return borrowed, leased property or using such property illegally resulting in an inability to return the property;
e) Neglect leading to damage to the property of the State, agencies, organizations, or enterprises.
2. A fine of 3,000,000 VND to 5,000,000 VND for any of the following acts:
a) Destroying or intentionally damaging property of individuals or organizations, excluding violations specified in point b clause 3 of Article 21 of this Decree;
b) Using deception or creating circumstances to compel others to hand over money or property;
c) Fraud or deceit in real estate brokerage or service guidance for buying, selling real estate or other properties;
d) Buying, selling, or storing property known to be sourced from illegal activities;
e) Using, buying, selling, mortgaging, or illegally holding property of others;
f) Extorting property without criminal prosecution.
3. Additional penalties:
a) Confiscation of violating goods or tools for acts specified in points a, b, c, and d of clause 1 and points a, b, c, and d of clause 2 of this Article;
b) Expulsion of foreign violators specified in clauses 1 and 2 of this Article.
4. Remedial measures:
a) Forfeiture of illegal profits obtained from acts defined in points c, d, and e of clause 2 of this Article;
b) Returning property illegally held for acts defined in points e and f of clause 2 of this Article;
c) Restoration to the original state for violations specified in point a of clause 2 of this Article.
Thus, according to the above regulations, absconding without repaying the debt despite having the capability can result in administrative penalties, specifically a fine ranging from 2,000,000 VND to 3,000,000 VND. Besides the fine, additional penalties can also be imposed as per the above regulations.
Can absconding without repaying debt despite having the capability be criminally prosecuted?
Based on clause 1 of Article 175 of the Criminal Code 2015 (amended by clause 35 of Article 1 of the Law on Amendments to the Criminal Code 2015), it is stipulated as follows:
Crime of abusing trust to appropriate property
1. Whoever commits any of the following acts to appropriate property valued between 4,000,000 VND and under 50,000,000 VND or less than 4,000,000 VND but has been administratively sanctioned for property appropriation or has been convicted of this crime or any of the crimes specified in Articles 168, 169, 170, 171, 172, 173, 174, and 290 of this Code, has not had the conviction expunged and yet continues to violate, or the property is the primary means of living for the victim and their family, shall be subject to non-custodial reform for up to 03 years or a prison term of 06 months to 03 years:
a) Borrowing, leasing, or receiving property from others in the form of a contract and using deceit or absconding to appropriate that property, or reaching the term despite having the capability to return but intentionally does not return it;
b) Borrowing, leasing, or receiving property from others in the form of a contract and using the property for illegal purposes resulting in an inability to return the property.
The act of absconding without repaying the debt despite having the capability can be criminally prosecuted for abusing trust to appropriate property if the conditions of this crime as stipulated above are met.
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