Question:
On June 15, 2023, I lent Mr. T VND 100,000,000, with a loan term of 1 year and an interest rate of 3% per month. Mr. T and I drafted a Loan Agreement to document this loan. However, on the due date, Mr. T failed to repay the loan and is intentionally avoiding me. Can I file a lawsuit against Mr. T to recover the principal amount of VND 100,000,000 and the interest?
Answer:
Under Vietnamese law, you have the right to file a lawsuit to demand that Mr. T repay both the principal and interest based on the loan agreement between the two parties.
When proceeding with the lawsuit, you should note the following:
- Filing a lawsuit to recover the principal amount:
According to the 2015 Civil Code, the loan between you and Mr. T is based on the mutual agreement (the Loan Agreement). If Mr. T fails to repay by the due date, you may submit a lawsuit petition along with supporting evidence to the competent court, requesting that the court orders Mr. T to repay the loan amount.
- Interest:
Regarding the interest, the agreed rate of 3% per month, equivalent to 36% per year, exceeds the legal limit (currently 20% per year as stipulated in Article 468 of the 2015 Civil Code). Therefore, when filing a lawsuit, you can only request that Mr. T pays the maximum allowable interest rate, which is capped at 20% per year on the principal amount.
Additionally, you may request interest on unpaid interest and overdue principal.
- Lawsuit documentation:
To file a lawsuit, you need to prepare the following documents:
- Lawsuit petition;
- Loan agreement or documents proving the loan arrangement;
- Evidence showing Mr. T’s failure to fulfill the repayment obligation.
- Competent authority:
You should submit the lawsuit petition to the People’s Court with jurisdiction (typically the District Court where Mr. T resides or works). - Procedural process:
After receiving the lawsuit petition, the court will accept the case and proceed with the legal process as prescribed by law.
