Summary Bankruptcy Procedure under Vietnam’s 2025 Law on Recovery and Bankruptcy

The Law on Recovery and Bankruptcy No. 142/2025/QH15, passed by the National Assembly on 11 December 2025 and effective from 1 March 2026 (certain provisions under Article 38.3 effective from 1 July 2026), is the sole current legal instrument governing corporate and cooperative recovery and bankruptcy in Vietnam. A notable innovation is the “summary procedure” — covering summary recovery (Articles 68–69) and summary bankruptcy (Articles 70–71) — designed for simple cases with few creditors or where the enterprise has no remaining assets.

Terminology note: the statute uses “summary procedure” (thủ tục rút gọn), not “simplified procedure”. This article follows the statutory term.

The new name: “Law on Recovery and Bankruptcy”

Under Article 3.1, the law governs two independent procedures: the recovery procedure and the bankruptcy procedure, with priority given to recovery. This marks a major shift from Bankruptcy Law 51/2014/QH13, which expired on 1 March 2026 (Article 87.2 of Law 142/2025) and now serves only as a historical reference — it must not be cited as current authority.

Conditions for summary bankruptcy (Article 70.1)

A judge may apply the summary bankruptcy procedure only where the case falls into one of six groups:

Small scale: the enterprise has no more than 20 unsecured creditors and total principal debt of no more than VND 10 billion;
Small and micro enterprises or cooperatives (as defined by Decree 80/2021/ND-CP);
Enterprises with no remaining assets, or insufficient assets to pay bankruptcy fees, advances and costs;
Credit institutions — under the separate mechanism in Article 72;
Insurance and reinsurance enterprises whose operations have been terminated from control by the Ministry of Finance;
Other cases under law or guidance of the Supreme People’s Court.

Common pitfall: the conditions refer to “unsecured creditors” and “principal debt” — writing “total creditors” or “total debt” misstates the statutory test.

Summary bankruptcy process (Article 71)

10 days from acceptance: the judge decides whether to apply the summary procedure for cases under points a and b of Article 70.1;
The resolution period is halved compared with ordinary bankruptcy proceedings — note: the law does not fix a specific number of days for this “half”, which must be measured against the ordinary timeline in each case;
A creditors’ meeting resolution passes when unsecured creditors representing at least 51% of total unsecured debt approve;
30 days: the judge issues a bankruptcy declaration for cases under point c of Article 70.1 (enterprises with no remaining assets).

Special cases: credit institutions and insurers

Under Article 2, credit institutions and insurance enterprises may not use the summary recovery procedure, but they may use the summary bankruptcy procedure under the separate mechanism in Articles 70–72. Confusing the two is a common error.

Two other key changes

“Insolvency” (Article 5.2): an enterprise that fails to pay a due debt within 06 months of the due date — up from 03 months under the old law;
Jurisdiction: the regional People’s Court (Article 6), replacing the old default of the provincial People’s Court.

Risks and practical recommendations

Do not cite Law 51/2014 as current authority: it expired on 1 March 2026; all references must be to Law 142/2025;
Supreme People’s Court guidance: as of 14 October 2026, no implementing guidance for Articles 68, 70 or 72 has been recorded — the detailed method for determining “total principal debt” still awaits guidance, so enterprises should be cautious when self-assessing eligibility;
Eligible enterprises should prepare complete financial records, a creditor list and a secured/unsecured debt classification from the outset, so the judge has a basis to decide on summary application within the 10-day window;
For credit institutions and insurers: identify the correct separate mechanism in Articles 70–72 and do not mistakenly apply summary recovery rules.

Frequently asked questions

How does summary bankruptcy differ from ordinary bankruptcy?

The core difference is a halved resolution period, with shortened milestones: 10 days for the judge to decide on application, 30 days for a bankruptcy declaration where no assets remain, and a 51% of total unsecured debt threshold for creditors’ meeting resolutions.

Can an enterprise that still has assets use summary bankruptcy?

Yes, if it falls into the other groups under Article 70.1 (for example: no more than 20 unsecured creditors and principal debt of no more than VND 10 billion; small or micro enterprises). The “no remaining assets” group (point c) is only one of six.

Exactly how many days is “half the period”?

The law does not fix a specific number of days for the summary procedure; the period is one half of the ordinary bankruptcy timeline in each case. No fixed figure should be inferred without checking the ordinary timeline.

Is the 2014 Bankruptcy Law still applicable?

No. Bankruptcy Law 51/2014/QH13 expired on 1 March 2026 (Article 87.2 of Law 142/2025). All recovery and bankruptcy proceedings now apply the Law on Recovery and Bankruptcy 142/2025.

Applicable legal framework

Law on Recovery and Bankruptcy No. 142/2025/QH15 (passed 11/12/2025; effective 01/3/2026; certain provisions per Article 38.3 effective 01/7/2026) — sole authority; Articles 2, 3.1, 5.2, 6, 68–72, 87.2.
Decree 80/2021/ND-CP (effective 15/10/2021) — criteria for small and medium enterprises.
Bankruptcy Law 51/2014/QH13 — expired 01/3/2026; historical comparison only.