Right of Recourse for Secured Assets

Based on Article 7 of Decree 21/2021/ND-CP (effective from May 15, 2021), the content is stipulated as follows:

- The rights of the secured party regarding the collateral in the security measure that has taken effect against third parties do not change or terminate in the case where the collateral is transferred to another person due to sale, donation, exchange, transfer, other transfer of ownership rights; possession, use, or benefits from the collateral without legal grounds and not falling under the cases prescribed in Clause 2 of this Article.

- The right of recourse of the secured party regarding the collateral does not apply to the following assets:

+ Collateral that has been sold, transferred, or otherwise transferred in ownership due to the consent of the secured party and is not continuing to be used to secure the agreed obligation;

+ Mortgaged property that has been sold, replaced, or exchanged according to the provisions of Clause 4 Article 321 of the Civil Code;

+ Collateral no longer exists or is replaced by other property as stipulated in Article 21 of this Decree;

+ Other cases as stipulated by the Civil Code and other related laws.

- In the event that the secured party is an individual who has died or a legal entity that has ceased to exist, the right of recourse to the collateral of the secured party does not terminate but is carried out in accordance with Article 658 of the Civil Code and other provisions on inheritance of the Civil Code in case the secured party is an individual who has died or in accordance with the provisions of the law on dissolution of legal entities and bankruptcy in case the secured party is a legal entity that is dissolved or declared bankrupt.

Respectfully!