Is it allowed to transfer debt repayment obligations to another person in Vietnam?

Hello, Lawnet would like to answer as follows:

1. Is it allowed to transfer debt repayment obligations to another person in Vietnam?

According to Article 370 of the Civil Code 2015, the transfer of civil obligations is as follows:

- An obligor may transfer a civil obligation to a subrogatee of the obligor with the consent of the obligee, except where the obligation is personal to the obligor or where the law provides that the obligation may not be transferred.

- Upon a transfer of the obligation, the subrogatee of the obligor shall become the obligor.

Note: where a secured civil obligation is transferred, the security shall terminate, unless otherwise agreed. (According to Article 371 of the Civil Code 2015)

The obligor (debtor) can transfer his/her obligations to another person (a third person) to perform on his/her behalf, but must have the consent of the obligee (creditor). However, this transfer of obligations does not apply to the following cases:

- Obligations attached to the identity of the obligor: meaning obligations of a personal nature, inseparable from the individual debtor.

- There are types of obligations that the law prohibits from being transferred to others.

Thus, the above regulations outline the principles, conditions, and limits on the transfer of civil obligations.

2. What are case of termination of debt repayment obligation in Vietnam?

According to Article 372 of the Civil Code 2015, a civil obligation shall terminate in any of the following cases:

- The obligation is fulfilled;

- The parties so agree;

- The obligee waives performance of the obligation;

 The obligation is substituted by another civil obligation;

- The obligation is offset;

- The obligee and the obligor merge;

- The prescriptive period for a release from the civil obligation has expired;

- The obligor being a natural person dies, or the obligor being a juridical person ceases to exist, and the obligation must be performed by that particular natural person or juridical person;

- The obligee being a natural person dies and the right to demand does not form part of the bequeathed estate, or the obligee being a juridical person ceases to exist and the right to demand is not able to be transferred to another juridical person;

- A distinctive object which is the subject matter of the civil obligation no longer exists and is substituted by another civil obligation.

- Other cases as provided by law.

3. Can the right to demand be transferred to another person?

According to Article 365 of the Civil Code 2015, regulations on transfer of right to demand are as follows:

- A party having the right to demand the performance of a civil obligation may transfer such right to demand to a subrogatee of the obligee as agreed, except in the following cases:

+ The right is the right to demand support or the right to demand compensation for any damage resulting from harm to life, health, honor, dignity or reputation;

+ The obligee and the obligor agree that the right to demand may not be transferred;

- Where a person having a right to demand transfers such right to a subrogatee, the subrogatee of the obligee shall become the person having the right to demand. The transfer of right to demand does not require the consent of the obligor.

A person transferring a right must notify the obligor in writing of the transfer of the right to demand, unless otherwise agreed. If the person transferring the right fails to notify the obligor thereby the obligor incurs expenses, the person transferring the right must pay for those expenses.

- A person transferring a right to demand must provide the necessary information and the relevant documents to the subrogatee of the obligee. A person transferring a right to demand and not requiring provision of necessary information and the relevant documents to the subrogatee of the obligee, thereby causing damage, must compensate for such damage.

(According to Article 366 of the Civil Code 2015).

Note:

- In case the party transferring the requesting rights does not notify the transfer of rights and incurs costs to the obligor, the party transferring the requesting rights must pay these costs.

- A person transferring a right to demand shall not be liable for the capability of the obligor to perform the obligation, unless otherwise agreed (According to Article 367 of the Civil Code 2015)

- Where a right to demand the performance of a secured civil obligation is transferred, the transfer of the right to demand shall include the security. (According to Article 368 of the Civil Code 2015)

Thus, according to the above provisions, it is possible to transfer the right to request the performance of an obligation (the transferor) to another person (the assignee) to exercise that right to request, and at the same time, the transferor is not responsible for the obligor's ability to perform its obligations after transfer, unless otherwise agreed.

Best regards!

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