When a business becomes insolvent, budgeting for legal procedures is a crucial step in protecting the remaining rights of owners and creditors. According to current laws on business bankruptcy, notably the Bankruptcy and Recovery Law (Law No. 142/2025/QH15), the types of business bankruptcy costs have been standardized to ensure transparency. This article will analyze in detail the fees and remuneration of bankruptcy administrators and provide guidance on financial accounting for businesses in 2026.
Basic types of business bankruptcy costs
Below are the main cost categories that applicants need to be aware of when beginning the process at the Court to avoid delays due to budget shortfalls.
Filing fee for initiating bankruptcy proceedings.
This is a mandatory fee that must be paid immediately upon submitting an application to the competent court, calculated according to the current fee schedule for court fees and charges. The purpose of this fee is to cover administrative activities and processing of the application. Typically, this fee is set at a fixed and relatively low amount compared to the size of the business, but it is a prerequisite for the court to consider the application.
Bankruptcy advance costs
Advance payment is the amount of money paid in advance by the applicant to cover initial professional expenses. According to Article 22 of Law 142/2025/QH15, advance payment for business bankruptcy includes the following items:
- Costs for publishing and publicly posting court decisions on electronic portals and media outlets.
- Costs for inventorying and determining the actual value of a business's assets in the initial stage of the procedure.
- An advance payment of fees to the Receiver or the asset management and liquidation company involved in the case.
The entity obligated to pay the advance bankruptcy costs.
Determining who is responsible for paying the initial fees depends on the legal standing of the applicant requesting the initiation of proceedings.
- For creditors filing for bankruptcy: Creditors are obligated to pay an advance on bankruptcy costs, except in cases where employees or employee representative organizations file for wage entitlements.
- For businesses that apply independently: The legal representative or owner of the business must secure this advance payment from the remaining financial resources of the entity.
- Cases where advance payment is waived: In order to protect social security rights, employees and union representatives filing the application are not required to pay court fees or advance payment for business bankruptcy costs.
Remuneration of the Receiver and asset management fees
The fees for bankruptcy administrators typically account for the largest proportion of corporate bankruptcy costs due to the high level of expertise required in managing and overseeing assets.
How to determine the administrator's remuneration in 2026.
The administrator's fee is not fixed but varies based on the complexity of each case. The criteria for determining this include:
- The scale of the total asset value and the number of creditors involved in the case.
- The effectiveness of preserving and recovering debts for businesses.
- Agreement between the business and the Receiver for business recovery cases or according to the government-mandated framework for liquidation procedures.
Actual asset operating costs
In addition to fees, actual expenses incurred such as warehouse rental for machinery storage, security services, or independent audit fees are also included in the costs of corporate bankruptcy. These amounts will be deducted directly from the company's asset value after court approval.
Summary of business bankruptcy expenses
To give managers a clear overview, we have summarized common expenses in the table below:
| Type of expense | Recipients of advance payments | Fee characteristics | Refundability |
|---|---|---|---|
| Court fees | The applicant | Fixed according to the court fee schedule. | Non-refundable |
| Bankruptcy advance | The applicant | Varies depending on the size of the application. | Return priority from business assets |
| Remuneration of the Receiver | Business assets | According to %, the value of the asset/agreement | Extracted from liquidated assets |
| Valuation fee | Business assets | According to the appraisal service fee schedule. | Extracted from liquidated assets |
Please note that the actual cost can range from a few million to tens of millions of VND or higher, depending on the total assets and the complexity of the debt recovery. The advance payment will be reimbursed to the applicant in order of priority if the business has sufficient assets.
Order of priority for paying bankruptcy costs
According to Article 54 of Law 142/2025/QH15, the costs of corporate bankruptcy are given top priority in the debt payment schedule to ensure that the legal process is not interrupted.
Here is the order of payment when a business divides its assets:
- Bankruptcy costs, court fees, and administrator's fees.
- Wages, severance pay, social insurance, and other employee benefits are owed.
- Debts incurred after the commencement of proceedings are intended for the purpose of business recovery.
- Financial obligations to the State (taxes, fees).
- Unsecured debts to creditors on the finalized list.
Accounting for business bankruptcy costs and the risks associated with insufficient funding.
Accounting issues and the legal consequences of insufficient budget are matters that CFOs and chief accountants need to pay particular attention to.
Are bankruptcy costs deductible expenses?
For businesses undergoing business recovery procedures, bankruptcy expenses (fees, consulting fees, appraisal fees) are considered expenses directly related to business operations. If supported by valid invoices and documents, these expenses can be deducted when determining corporate income tax, helping to alleviate the financial burden during this difficult period.
Handling situations where businesses lack sufficient funds to pay the advance deposit.
If the business has depleted its accounts and is unable to submit an advance payment, the court will order the application to be returned. However, this does not terminate the legal representative's liability. In cases of deliberate delay in submitting the application due to lack of funds without taking corrective measures, the managers may be held personally liable for any resulting damages to creditors.
A practical example illustrating the incurred costs.
Suppose a business has total assets worth 20 billion VND, operates in 3 different branches, and has 10 major creditors. When filing for bankruptcy, estimated costs might include:
- Court fees: 2,000,000 VND.
- Advance payment for newspaper advertisement and notice posting: 10,000,000 VND.
- Advance payment for the Receiver's initial fee: 30,000,000 VND.
- Cost of inventorying assets at 3 branches: 15,000,000 VND.
In total, applicants need to prepare approximately VND 57,000,000 for their application to be processed and for the subsequent steps to proceed smoothly.
Conclude
Accurately estimating the costs of corporate bankruptcy in 2026 helps stakeholders proactively manage their finances and ensures the supremacy of law. Understanding payment priorities and tax accounting methods will help businesses minimize legal risks for their managers.
To develop the most comprehensive response strategy, please refer to the following analysis. New points in the Bankruptcy Recovery Law 2025 The aim is to equip our organization with optimal risk management knowledge.
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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.
