The State Bank of Vietnam has proposed that sole homes and the borrower’s only sources of income be exempt from seizure under bad debt enforcement, according to a draft decree now open for public consultation.
The State Bank of Vietnam has proposed assets as sole homes and only sources of income be exempted from bad debt asset seizure.
The draft decree stipulates that collateral may be seized only if it is not the borrower’s sole residence or their primary means of livelihood. This measure aims to prevent repossessions that could render households homeless or deprive them of the means to sustain themselves.
Drawn from international best practice, the proposal cites Germany’s exemptions designed to preserve basic living conditions and Canada’s rules protecting essential work tools from debt collection. The approach aligns with Việt Nam’s Law on Housing, Law on Residence and the Law on Enforcement of Civil Judgements.
The draft defines a 'sole home' as the only residential property owned by the borrower, in which they live permanently or regularly. The term 'primary or sole work tool' refers to any equipment or means that represent the borrower’s principal or unique source of income.
Borrowers would be required to formally declare and provide evidence to qualify their property or equipment as a sole home or essential work tool, whereas lenders would not bear responsibility for verifying these claims.
The decree is expected to be approved through a fast‑track process before September 15 and take effect from October 15.
