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BANKRUPTCY CASE V.B AND X.N

Posted on

20 August, 2021

The debt extends beyond the statute of limitations leading to many companies failing to collect a debt, in addition to bad debts, have to go through difficulties when filing and executing sentences. Aplus Law’s attorney has applied bankruptcy rules to collect debts quickly to clients within 2 months.

[MAIN CONTENT]

The company X.N operates the field of education, owes V.B. 3 billion. bad debt has been over 3 years, X.N has confirmed the debt.

V.B. company had come to an attorney for advice to reclaim the bad debt

[LEGAL ISSUES]

V.B. Company came to ask the attorney to address the following issues:

  • Debt overdue 3 years with the expiry of the debt collection period
  • The direction of solving the case

[ATTORNEY’S SOLUTION]

Aplus Law’s Attorney identified this as a commercial dispute between the two legal entities. The statute of limitations for settlement of disputes in accordance with the Commercial Law, specifically in Article 319 provides for the statute of limitations for settlement of commercial disputes is 2 years from the date of infringement

Article 319. statute of limitations for a lawsuit

The statute of limitations imposed on commercial disputes is two years from the time when legitimate rights and interests are infringed, except for cases specified in Point e Clause 1 Article 237 of this Law.

The debt of the company X.N and V.B has been 3 years and has passed the statute of limitations. Attorney has negotiated public debt on behalf of clients with X.N., the party of X.N also knows that the statute of limitations is over and wants not to pay this debt.

It was found that this case could not be sued in the direction of debt collection under the civil procedure law. Attorney has advised clients to move to the direction of declaring company X.N bankruptcy in case of insolvency of due debts under the Bankruptcy Law and the guidance of the Supreme People’s Court

Bankruptcy is the status of an enterprise or cooperative that is insolvent and is declared by a court to be bailiffs.

Article 4. Interpretation of words

In this Law, the following terms shall be construed as follows:

      1. Insolvent enterprises or cooperatives are enterprises or cooperatives that fail to fulfill the obligation to pay the debt within 03 months from the due date of payment.
      2. Bankruptcy is the status of insolvent enterprises and cooperatives and is issued by the People’s Court by a decision to declare bankruptcy

The consequences of bankruptcy are the termination of the existence, operation of the enterprise; termination of the performance of the obligation to charge interest on the enterprise; settlement of the consequences of the suspended transaction; declaration of the transaction invalidated and the resolution of the consequences of the invalidated transaction; termination of the labor contract with the employee, address the rights of employees. With a business (the debtor) operating in the bonus, facing the risk of being declared bankrupt will greatly affect the operation of the business and certainly, no debtor wants to fall into this situation.

Insolvency is an enterprise that fails to fulfill the obligation to pay the debt for a period of 3 months from the due date. According to the instructions of the Supreme Court of Eligibility, the conditions of insolvent are clearly specified as follows:

  •  Debt due for payment
  • The enterprise does not make payments more than 3 months from the due date in two cases: the enterprise has no payment assets; the enterprise has assets but does not pay debts.

Thus, although X.N still has assets but does not pay debts, it is still considered insolvent

 Aplus Law’s Attorney has advised and authorized representatives of M.B. Company to file a request to declare X.N. bankruptcy. The court has taken over and X.N has paid the amount of public to V.B.

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