The Bankruptcy Recovery Law 2025 (Law No. 142/2025/QH15) was recently passed by the National Assembly amidst challenges facing the economy regarding bad debts and capital flows. Instead of being merely a tool to terminate businesses as in previous regulations, the new law focuses on rescue and restructuring solutions. This article will help business owners understand the core changes to transform risks into genuine recovery opportunities.
Overview of the Bankruptcy Recovery Act 2025
The Bankruptcy Recovery Act 2025 was enacted to replace the limitations of the Bankruptcy Act 2014, which was often considered a dead-end process that many businesses were hesitant to approach. The introduction of this document marks a significant shift in legislative thinking, towards protecting businesses and maintaining economic stability.
What is the Bankruptcy Recovery Act 2025?
Law No. 142/2025/QH15 not only changes the name but also completely shifts the legal mindset. The focus of the law shifts from coercive asset liquidation to supporting businesses in finding solutions for revival through transparent and fair legal mechanisms. The addition of the word "recovery" in the name shows a strong message from the State: Prioritizing saving businesses with potential instead of automatically putting them into the debt liquidation process.
Scope of regulation and subjects of application
Based on Articles 1 and 2 of Law 142/2025/QH15, the scope of regulation includes the principles, procedures, and processes for resolving business recovery cases. The scope of application is very broad, specifically including the following legal entities:
- Types of businesses established under the Enterprise Law.
- Cooperatives and cooperative unions are established in accordance with the Law on Cooperatives.
- Note: The simplified recovery procedure does not apply to credit institutions and insurance companies due to the specific nature of national financial risk management.
The most important new features of the Bankruptcy Recovery Act 2025
Compared to the 2014 Bankruptcy Law, Law 142/2025/QH15 introduces five core changes that business managers cannot ignore to protect their rights. These new provisions are designed to increase flexibility and reduce administrative burdens for debtors.
Prioritize business recovery before declaring bankruptcy.
This is the golden rule stipulated in Article 3. Courts are now required to consider the feasibility of recovery options before deciding to declare bankruptcy. This change gives businesses valuable time to:
- Renegotiate debt arrangements with banks and business partners.
- Seeking strategic investors to inject capital for restructuring.
- Change the management model or cut back on inefficient business segments.
Expanding and tightening the rights and obligations to file applications.
The new law clarifies the responsibilities of the legal representative when a business becomes insolvent. Proactively filing for bankruptcy is no longer seen as an admission of failure, but rather a strategic move to:
- Preventing personal legal risks for business leaders.
- Protect existing assets from uncontrolled debt collection pressure from individual creditors.
- Ensuring transparency and avoiding accusations of asset concealment before bankruptcy.
Simplified recovery and bankruptcy procedures
This helps address the issues of time and cost, which were previously the biggest obstacles. The streamlined procedure allows cases with high levels of agreement between businesses and creditors to be resolved in a significantly shorter time. This not only helps businesses stabilize their situation sooner but also minimizes the costs of pursuing lengthy legal proceedings in court.
Enhancing the role of the Insolvency Administrator during the recovery phase.
Under the new law, receivers are not only asset supervisors but also act as expert advisors. They serve as a crucial link between businesses and creditors, helping both parties understand the financial situation and ability to repay. The new mechanism ensures that receivers operate independently and transparently, minimizing conflicts of interest that could jeopardize the recovery plan.
Tighten control over void transactions prior to the opening of proceedings.
According to Article 49 of Law No. 142/2025/QH15, transactions occurring within six months prior to the opening of the procedure that show signs of irregularities will be thoroughly reviewed. The following actions will generally be considered invalid:
- Transferring assets at a price significantly lower than market value.
- Making payments on debts that are not yet due in an unusual manner.
- Convert unsecured debts into secured debts using the company's assets.
Comparing the Bankruptcy Recovery Act 2025 and the Bankruptcy Act 2014
To give your company the most visual understanding of the changes, we have compiled a comparison table of the key criteria between these two legal documents.
| Comparison criteria | Bankruptcy Law 2014 | Bankruptcy Recovery Act 2025 |
|---|---|---|
| Core objectives | Focus on debt recovery and asset liquidation. | Prioritize business recovery and survival. |
| Simplified procedure | Lack of clear regulations, difficult to enforce. | Detailed regulations and priority application will save resources. |
| Debtor's rights | Passive, often only applying when they are completely exhausted. | Proactively propose restructuring plans from the outset. |
| Processing time | Often lengthy due to complex administrative procedures. | Standardized with strict timelines. |
| Invalid transaction | Shorter review time, narrower scope. | Review conducted 6 months prior to opening the procedure with strict standards. |
Through the comparison table above, it can be seen that the 2025 Law has addressed the issue of prolonged cases causing waste of social resources, while also giving businesses greater autonomy in their recovery journey.
What benefits will businesses gain from the Bankruptcy Recovery Act 2025?
Early understanding of new regulations will help businesses make the most of the lifelines that the law provides during periods of financial difficulty.
Legitimate debt restructuring opportunities
Under court supervision, businesses have a strong legal standing to negotiate with creditors. Solutions such as debt restructuring, interest rate reduction, or debt-to-equity swaps will be implemented formally. This eliminates the situation where small creditors exert pressure through extreme debt collection methods, disrupting production.
Preserve assets and maintain business operations.
As soon as the court accepts the application and decides to open proceedings, a protective shield will be established around the business:
- Enforcement activities related to civil judgments will be temporarily suspended.
- The calculation of interest on overdue debt may be suspended depending on the recovery plan.
- Businesses have a golden opportunity to stabilize employee morale and retain strategic customers and partners.
What do businesses need to prepare to take advantage of the new law?
Although the Bankruptcy Recovery Act 2025 offers many advantages, businesses still need thorough preparation to ensure a smooth process. Below are some important points that managers should address immediately:
- Identify the early signs: Don't wait until your cash flow completely breaks down before seeking legal help. Proactively assess your monthly payment capacity.
- Financial transparency: A recovery plan will only be accepted by the court and creditors when the accounting figures are clear and accurately reflect the actual state of debt and assets.
- Develop a viable plan: Recovery is not just about paying off debt, but about changing how things operate. Businesses need a realistic business roadmap to convince stakeholders to grant them more opportunities.
- Expert consultation: The legal process for bankruptcy is complex, and close collaboration with lawyers and bankruptcy administrators will help businesses avoid procedural errors.
Conclude
The Bankruptcy Recovery Act 2025 presents a second chance for businesses with strong internal capabilities but facing temporary difficulties. Shifting the mindset from fear of bankruptcy to proactive recovery will help leaders protect their business achievements and the rights of their employees. Understanding correctly, applying early, and gaining a significant advantage is the guiding principle for any entity wishing to stand firm and thrive after a financial storm. Actively update yourself on the latest implementation guidelines to secure an advantage in your business restructuring process.
Contact information for MAN – Master Accountant Network
- Address: 19A, 43rd Street, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Other services
- Auditing: Auditing Services, Construction Auditing Services, Financial statement audit services
- Accounting and Taxation: Tax accounting services, Tax report, Transfer Pricing Advisory. Tax Accounting Services, Tax reporting services, Transfer Pricing Service, Affiliate Trading Service
- Legal aspects: Work permit services, Business registration certification services, Investment Certificate
- Other: Transfer Pricing Service, Affiliate Trading Service, Business Operations Consulting Services
Content production is overseen by: Mr. Le Hoang Tuyen – Founder & CEO of MAN – Master Accountant Network, CPA Vietnam with over 30 years of experience in accounting, auditing, and financial consulting.
