VietnameseThe 2025 Law Amending the Law on Credit Institutions, No. 96/2025/QH15, which takes effect on October 15, 2025, adds new provisions on the distraint of collateral assets.
Specifically, Clause 2 Article 1 of this Law adds Article 198b to the 2024 Law on Credit Institutions, stipulating the distraint of assets of a judgment debtor currently used as collateral for a non-performing loan.
Article 198b. Distraint of assets of judgment debtors used as collateral for non-performing loans
Assets of a judgment debtor currently used as collateral for a non-performing loan at a credit institution, foreign bank branch, or debt trading and handling organization shall be subject to distraint and disposal in accordance with the law on civil judgment enforcement if it falls under one of the following cases:
1. The security contract was concluded and became effective after the date on which the court judgment or decision became legally effective;
2. Enforcement of judgments or decisions on alimony or compensation for life or health damage;
3. With written consent from the credit institution, foreign bank branch, or debt trading and handling organization.
Accordingly, assets of a judgment debtor currently used as collateral for a non-performing loan at a credit institution, foreign bank branch, or debt trading and handling organization shall be subject to distraint and disposal in accordance with the law on civil judgment enforcement if falling under one of the following cases:
The security contract was concluded and became effective after the court judgment or decision became legally effective;
Enforcement of judgments or decisions on alimony or compensation for life or health damage;
There is written consent from the credit institution, foreign bank branch, or debt trading and handling organization.
