4 COMMON MISTAKES THAT CAUSE BUSINESSES TO LOSE DEBT RECOVERY OPPORTUNITIE

Situation

In practice, many businesses encounter situations where:

• Valid contracts and supporting documentation are in place
• The debtor’s payment obligation is clearly established
• Multiple payment requests have been made

Yet, after a prolonged period, the debt remains unrecovered.

In many cases, the issue does not lie in the creditor’s legal rights, but in the inappropriate legal approach and lack of a proper recovery strategy.

Legal Framework

Debt recovery in Vietnam must comply with the following legal framework:

• Civil Code 2015 – governing contractual obligations and civil liabilities
• Civil Procedure Code 2015 – governing dispute resolution procedures before courts
• Law on Civil Judgment Enforcement 2008 (as amended), and the Law on Civil Judgment Enforcement 2025 (effective from July 1, 2026) – governing the enforcement of legally effective judgments and decisions

Any acts involving coercion, harassment, or unlawful pressure during the debt recovery process may give rise to legal liability for the creditor, including administrative sanctions or criminal consequences.

Analysis

1. Mistake 1: Relying on “quick recovery” solutions without legal basis

Some businesses opt for unclear or informal methods in an attempt to accelerate recovery.

However:

• Such methods do not create legal enforceability
• They fail to ensure actual recovery
• They may expose the creditor to legal risks

Debt recovery without a legal foundation rarely produces sustainable results

2. Mistake 2: Failing to assess enforceability at an early stage

In many cases:

• Legal action is initiated before asset verification
• The debtor’s financial condition is not properly assessed

As a result:

• A favorable judgment may still be unenforceable
• Time and costs increase significantly

Winning a case does not necessarily mean recovering the debt

3. Mistake 3: Allowing emotional responses to influence the process

Under financial pressure, businesses may:

• Act hastily
• Escalate conflicts with the debtor
• Overlook potential negotiation opportunities

This may lead to:

• Loss of early settlement opportunities
• More complex disputes

Debt recovery requires strategic control, not reactive decision-making

4. Mistake 4: Lack of a comprehensive legal strategy

Some businesses approach debt recovery in a fragmented manner by:

• Taking isolated actions without coordination
• Lacking a clear procedural roadmap
• Failing to follow through with enforcement

Consequences include:

• Prolonged resolution timelines
• Reduced recovery effectiveness

Debt recovery must be approached as a structured legal process, not a series of disconnected actions

Proper Approach

An effective debt recovery process typically includes:

• Legal review and assessment of the debt
• Development of a tailored recovery strategy
• Structured negotiation based on legal grounds
• Initiation of legal proceedings where necessary
• Continuous monitoring of enforcement procedures

This approach helps to:

• Ensure legal compliance
• Control risks
• Improve actual recovery outcomes

Recommendations

To enhance recovery effectiveness, businesses should:

• Avoid informal or unlawful debt collection practices
• Assess enforceability before initiating legal action
• Engage legal professionals with practical recovery experience
• Closely monitor the enforcement process after obtaining a judgment

Proper preparation from the outset helps to:

• Reduce costs
• Mitigate risks
• Increase the likelihood of successful recovery

Conclusion

In debt recovery, the greatest risk does not lie in the debt itself, but in how the process is handled.

A single strategic mistake may result in the loss of the entire recovery opportunity.

A lawful, structured, and strategic approach is essential to protect the creditor’s rights effectively.