Can order of priority for payment between joint secured parties be changed in Vietnam? What are cases of realization of collateral in Vietnam?
Can order of priority for payment between joint secured parties be changed in Vietnam? What are cases of realization of collateral in Vietnam?
Duyen and I have loaned Mr. Hung to joint secure our property and the payment term has been half a year and he has not paid. So, in this case, can the collateral be handled? According to the regulations, Ms. Duyen will be paid first, but she and I can discuss whether I will receive it first, or do I have to proceed in accordance with the regulations?
Can order of priority for payment between joint secured parties be changed in Vietnam?
Pursuant to Article 308 of the 2015 Civil Code stipulates:
1. When an asset is used to secure the performance of many obligations, payment priority order between the joint secured parties shall be determined as follows:
a) If all types of security take effect against a third party, the order of priority for payment shall be determined according to the order of effect against the third party;
b) If there are some types of security take effect against a third party while some types of security do not take effect against the third party, the payment of obligations with security taking effect against the third party shall be given priority;
c) If all types of security do not take effect against a third party, the order of priority for payment shall be determined according to the order of establishment of types of security.
2. The order of priority for payment prescribed in Clause 1 of this Article may be changed as agreed by the parties. The subrogating party of the right to priority of payment shall only be given priority within the secured extent of the subrogated party.
Thus, according to current regulations in Vietnam, in the event that the parties receiving the guarantee can agree on the order of priority for payment between joint secured parties, it is possible to change the order of payment priority.
What are cases of realization of collateral in Vietnam?
Pursuant to Article 299 of the 2015 Civil Code stipulates cases of realization of collateral:
1. An obligator fails to perform or perform not as agreed an obligation when it falls due.
2. An obligator must perform the secured obligation before time limit due to his/her violation against the obligation as agreed or prescribed by law.
3. Other cases as agreed by the parties or prescribed by law.
According to this Article, the collateral will be handled in the cases specified above in Vietnam.
Best Regards!
