THE ISSUE OF JUDGMENT DEBTORS WITHOUT CONDITIONS FOR ENFORCEMENT AND RECOMMENDATIONS FOR LEGAL IMPRO

Civil judgment enforcement is an extremely important step in the process of protecting the law, as this is the stage where the decisions of competent authorities are implemented in practice, ensuring the lawful rights and interests of the parties involved. However, in practice, civil judgment enforcement in our country currently often encounters one of the greatest obstacles, namely the situation where the judgment debtor has no assets or income to perform the obligation, commonly referred to as the judgment debtor being “without conditions for enforcement”. This situation causes many judgments to remain unenforced for long periods of time, directly affecting the legitimate rights of judgment creditors and at the same time reducing the effectiveness and prestige of the judicial system. The study, analysis, and proposal of recommendations to improve the law in this matter are necessary to ensure that justice is fully implemented.

1. Provisions on enforcement conditions of the judgment debtor

Pursuant to Article 44 of the Law on Civil Judgment Enforcement 2008 (amended and supplemented in 2014), the enforcement of a judgment or decision of a Court shall be carried out when the judgment debtor has assets, income, or other conditions ensuring the performance of the obligation. Within 10 working days after the deadline for voluntary execution of a judgment, if a judgment debtor fails to voluntarily execute the judgment, an enforcer shall conduct the verification. In case of implementation of a decision on application of provisional urgent measures, the verification must be conducted without delay. A judgment debtor shall truthfully declare, fully supply information on his/her assets, incomes and judgment execution conditions with the civil judgment enforcement agency and assume responsibility for his/her declaration. In case judgment debtors are unable to execute judgments, enforcers shall verify judgment execution conditions at least once every 6 months. In case judgment debtors who are unable to execute judgments are serving imprisonment sentences with the remaining serving time of at least 2 years or new addresses or places where the judgment debtors reside cannot be identified, the verification must be conducted at least once a year. After two verifications, if the judgment debtors are still unable to execute judgments, civil judgment enforcement agencies shall notify in writing verification results to the judgment creditors. Re-verification shall be conducted only when having new information on the judgment debtors’ judgment execution conditions.

The law also provides that a person is considered not to have sufficient conditions for enforcement when falling into one of the following cases[1] :

- The judgment debtor has no income or has low incomes which can only ensure his/her minimum living standards and persons whom he/she shall nurture, and has no assets for judgment enforcement or has assets the value of which is sufficient only for paying expenses for judgment enforcement or has assets which are not allowed to be distrained and handled for judgment enforcement under law;

- The judgment debtor is obliged to return specific objects but these objects no longer exist or are irreparably damaged or to returned papers are neither recoverable nor reissuable, provided involved parties do not otherwise agree.;

- The address or place of residence of the judgment debtor or a minor consigned to other persons for nurturing can not be identified.

Enforcement conditions are understood as the actual ability of the judgment debtor to perform obligations under the judgment. This is the basis for the enforcement authority to determine whether coercive enforcement measures may be applied. However, legal provisions currently only acknowledge the factual situation and have not yet established specific mechanisms to protect the interests of the judgment creditor when the obligation cannot be performed. The determination of whether a person has “sufficient conditions” or “insufficient conditions” for enforcement still largely depends on the ability to verify assets, which remains a matter with many limitations in practice.

2. Practical issues concerning lack of conditions for enforcement in many cases in Vietnam

Practice in civil judgment enforcement shows that the number of cases classified as “without conditions for enforcement” accounts for a large proportion, especially in the economic and commercial sectors. Implementing Circular No. 05/2024/TT-BTP dated 10 June 2024 of the Ministry of Justice providing regulations on the reporting and statistical regime for civil judgment enforcement, monitoring of administrative judgment enforcement, and pursuant to the direction of the leadership of the General Department of Civil Judgment Enforcement regarding the preparation of reports for the mid-term review of civil judgment enforcement activities, Division of Professional Affairs No. 3 compiled a report on civil judgment enforcement results for the 12 months of 2024. According to nationwide civil judgment enforcement results: in terms of cases, the number of cases without conditions for enforcement (excluding those transferred to a separate monitoring register) was 249,127 cases, accounting for 24.35% of the total cases subject to enforcement; in terms of monetary value, the amount without conditions for enforcement (excluding those transferred to a separate monitoring register) was VND 220,485,301,844,000, accounting for 44.09% of the total amount subject to enforcement.

According to reports from the press, many enterprises, after losing lawsuits, have “disappeared”, dissolved, or ceased operations. In some cases, enterprises still have assets but all such assets have been mortgaged to banks, making it impossible for enforcement authorities to organize enforcement or carry out asset coercion. This is not an isolated phenomenon but has become a common form, causing social frustration and posing challenges to the law. In addition, there are also many cases where enterprises or individuals dissipate assets before the judgment takes legal effect. Typically, many judgment debtors transfer houses and land to relatives or establish new companies to transfer capital and assets out of the old legal entity.

In practice, the number of cases in which the judgment debtor is an enterprise that has “disappeared” or no longer has the capacity to pay in order to enforce the judgment has increased significantly. A specific example is Company M.T - the owner of a dump truck that caused an accident and was jointly liable to compensate the victim’s family in the amount of VND 50 million. However, when the enforcement officer arrived at the address declared in the judgment to execute enforcement, it was discovered that the company branch stated in the judgment did not exist. Upon further verification, the civil judgment enforcement authority of province Q continued verification and discovered that the head office of Company M.T was located in Ho Chi Minh City; therefore, the case was entrusted to an enforcement authority in Ho Chi Minh City to carry out enforcement. However, after verification, the enterprise was still found not to exist. Only later, after many investigative and verification procedures, did the enforcement authority discover that Company M.T had been dissolved in order to establish a new company. Thus, from a legal perspective, this company had effectively “escaped” the obligation of judgment enforcement.[2]

The consequences of such cases are significant. First, the judgment creditor (the injured individual or business partner) cannot enforce their lawful rights and must accept losses in terms of property, litigation costs, expenses for legal assistance, and waiting time. Second, although the judgment has legal effect, it loses practical value, reducing public confidence in the judicial system—when a party wins the lawsuit but the judgment cannot be enforced. Third, enterprises or individuals take advantage of dissolution or conversion of legal entities to evade enforcement obligations, thereby undermining fairness in legal and social relations.

Procedurally, the verification of enforcement conditions is also one of the major difficulties for enforcement officers. In order to conduct verification, in all cases the enforcement officer must meet the judgment debtor in person before making a verification record; they must wait for truthful declarations and full provision of information regarding assets, income, and enforcement conditions from the judgment debtor. In practice, in cases where the judgment debtor deliberately delays or evades enforcement, this requirement is almost impossible to implement, as most judgment debtors do not cooperate with enforcement officers and evade responsibility. Based on the provisions of the Law on Civil Judgment Enforcement, guiding documents, and practical implementation, there are currently many obstacles. Many enforcement cases lack conditions for enforcement, leading to prolonged backlogs of cases, requiring enforcement authorities to devote more personnel and expenses to verification and investigation, thereby affecting the overall efficiency of civil judgment enforcement activities.

4. Recommendations for legal improvement

First, it is necessary to improve legal provisions relating to asset verification in the direction of strengthening the responsibilities of enforcement officers, state agencies, banks, enterprises, and other relevant organizations in accessing data on assets and income of judgment debtors.

The rights and interests of judgment creditors are significantly affected by the superficiality and lack of responsibility of enforcement officers assigned to carry out enforcement, as well as the irresponsibility of relevant agencies in promptly providing information. Meanwhile, current law does not yet contain sufficiently deterrent provisions to bind the responsibilities of individuals involved in enforcement activities. Regulations on the obligation of coordination by banks, tax authorities, and land registration authorities in providing information on assets of judgment debtors also need to be provided in more detailed terms. At the same time, a specific time limit should be added for the provision of such information so that appropriate enforcement measures can be taken promptly and efficiently.

Second, the State should establish a transparent asset management mechanism associated with the declaration, disclosure, and control of personal income, for example by strengthening the application of information technology in management and asset data connectivity.

Third, the responsibilities of individuals and organizations related to enforcement dossiers should be expanded, and sanctions against acts of intentionally dissipating or concealing assets to evade obligations should be strengthened, considering such acts as serious legal violations that may be subject to criminal liability.

In addition, it is necessary to study the establishment of a judgment enforcement guarantee fund or a civil judgment enforcement insurance mechanism so that in cases where the judgment debtor lacks the capacity to perform obligations, the rights and interests of the judgment creditor can still be partially ensured. At the same time, improving the capacity of enforcement officers and strengthening inter-agency coordination are also essential conditions to limit cases that remain “suspended” due to lack of enforcement conditions.

It can be seen that the situation where judgment debtors lack conditions for civil judgment enforcement is a major challenge, reducing the effectiveness of judgments and affecting the prestige of the judicial system. Although current law recognizes this reality, it is still not sufficiently strict and effective to completely resolve the issue. Improving the legal framework, establishing transparent asset management mechanisms, applying stricter sanctions, and strengthening coordination among competent authorities will be fundamental solutions to address this situation. Only when judgments are enforced seriously and promptly can justice truly be ensured and public confidence in the law be strengthened.

Lawyer Thanh Trà – FDVN Law Firm

[1] Article 44a of the Law on Enforcement of Civil Judgments 2008, as amended and supplemented in 2014

[2] Vietnam Law Newspaper, Businesses "escape" to evade enforcement of judgments, https://baophapluat.vn/doanh-nghiep-thoat-xac-tron-thi-hanh-an-post104431.html