Contents of handling debts purchased and received by the Vietnam Debt and Asset Trading Corporation (DATC)

According to the Decree No. 129/2020/NĐ-CP of Vietnam’s Government, contents of handling debts purchased and received by the Vietnam Debt and Asset Trading Corporation (DATC) include:

1. Handling of purchased debts:

- Adjust debt repayment terms, freeze debt, extend debt and adjust debt interest rates in accordance with debtors' capabilities and market conditions;

- Reduce the obligation to pay interest and part of the principal debt to the debtor, but ensuring that the debt purchase plan is effective;

- Reach an agreement with the debtor and related parties to collect debt with assets (including: land use rights, properties attached to land, assets attached to land formed in the future; projects, including real estate projects). Debt collection assets must be valued through an organization with the function of price appraisal and ensure that there are sufficient documents and conditions to transfer ownership between the parties in accordance with law;

- Reach an agreement with the debtor and the third party to transfer debt repayment obligations to the third party on the principle of ensuring more convenience for DATC in debt settlement and recovery;

- Reach an agreement with the business owner on converting debt into contributed capital to participate in enterprise restructuring as prescribed in Section 5 Chapter II of the Decree No. 129/2020/NĐ-CP;

- The handling of debt security assets shall comply with the provisions of law and Decree No. 129/2020/NĐ-CP.

2. Handling of received debts:

- Adjust debt repayment terms, freeze debt, extend debt and adjust debt interest rates in accordance with debtors' capabilities and market conditions;

- Reduce the obligation to pay interest and use part of the fee as prescribed to reduce part of the obligation to pay the principal in order to encourage the debtor to pay the debt early;

- Reach an agreement with the debtor and related parties to collect debt with assets (including: land use rights, properties attached to land, assets attached to land formed in the future; projects, including real estate projects). Debt collection assets must be valued through an organization with the function of price appraisal and ensure that there are sufficient documents and conditions to transfer ownership between the parties in accordance with law;

- Reach an agreement with the debtor and the third party to transfer the debt payment obligation to the third party on the principle of ensuring more convenience for DATC in debt settlement and recovery;

- Reach an agreement with the owner of the debt enterprise on the conversion of debt into contributed capital to participate in the restructuring of the debtor's enterprise as prescribed in Section 5 Chapter II of the Decree No. 129/2020/NĐ-CP;

- The handling of debt security assets shall comply with the provisions of law and Decree No. 129/2020/NĐ-CP;

- For debts that are determined to be uncollectible according to regulations (including debts handled before the handover time) that have been tracked off the balance sheet by DATC for 10 years or more (including the time the enterprise monitors off-balance sheet before transferring to DATC, if any), the DATC shall decide to exclude, not continue monitoring on the accounting books after consulting the Ministry of Finance. DATC is responsible for eliminating, not continuing to monitor the above debts.

View more details at the Decree No. 129/2020/NĐ-CP of Vietnam’s Government, effective from December 10, 2020.

Thuy Tram

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