Personal bankruptcy in VietNam: the necessity and possibility

Abstract

Vietnam's credit market, especially the consumer credit sector, has grown steadily in recent years. However, under the current Vietnam law, an individual’s liability is unlimited, and personal bankruptcy is not recognised. Because of the absence of a legal framework for personal bankruptcy, economically an individual cannot get out from the credit market and settle his/her debts in civilised ways when he/she has unfortunately become insolvent. Vietnamese lawmakers initially discussed the personal bankruptcy during the drafting of the LOB 2014 but concluded that allowing individuals and business households to declare bankruptcy is not urgent. By studying and analysing the Vietnam socio-economic conditions, international experiences with personal bankruptcy (of which the US personal bankruptcy legislation is mainly focused) and the potential challenges in case of Vietnam personal bankruptcy law to be adopted, this thesis is expected to find out whether the personal bankruptcy law is necessary, applicable and implementable to Vietnam. Upon the findings, it is believed that personal bankruptcy is necessary and applicable in consideration of socio-economic conditions in Vietnam. The basics and preliminary mechanisms of personal bankruptcy to be adopted in Vietnam are also proposed in this thesis for future research.