PILOT SETTLEMENT OF BAD DEBTS OF CREDIT INSTITUTIONS
On June 21, 2017, the National Assembly passed the Resolution No. 42/2017/QH14 dated June 21, 2017 of the National Assembly on the pilot settlement of bad debts of credit institutions, applicable to the debt that has arisen and has been considered as a bad debt before August 15, 2017; and the debt that has arisen before August 15, 2017 and has been considered as a bad debt during the effective period of the Resolution.
In accordance with the Resolution, credit institutions and the bad debt purchaser/manager sell bad debts or collateral transparently and in accordance with regulations of law; the selling price is consistent with market price, probably greater or smaller than principal balance of the debt.
The purchaser of a debt derived from bad debt of credit institution secured by collateral being land use right, property on land or off-the-plan property on land is entitled to inherit rights and obligations of mortgagee.
A credit institution or bad debt purchaser/manager is entitled to assign collateral being a real property project if the project has been approved by competent authorities as per the law; a decision on land allocation or land lease has been issued by competent authority; the project is not in dispute over land use right in a case that has been accepted but remained unsolved or has been resolving at an authorized court; the project is not distrained for judgment enforcement or observance to administrative decisions of competent authorities; no decision on revocation of project or land expropriation has been issued by competent authorities.
This Resolution takes effect on August 15, 2017 and remains in force for 5 years from the effective date.
