How long does the business bankruptcy process take? This is a common question among many investors and creditors, especially since the Law on Business Rehabilitation and Bankruptcy No. 142/2025/QH15 officially came into effect on March 1, 2026. Understanding these legal timelines not only helps businesses proactively plan for asset management but also optimizes the rights of all parties involved.
Overview of bankruptcy resolution timelines under the new law.
The changes in timeframes in the 2025 Bankruptcy and Recovery Law compared to the 2014 Bankruptcy Law mark a major step forward in economic justice reform in Vietnam. Instead of lengthy processes that tie up capital, the new law focuses on the following objectives:
- Minimize intermediate steps to unlock economic resources that are frozen in weak businesses.
- Enhance the transparency and accountability of judges and insolvency administrators in adhering to deadlines.
- Two main processes are clearly defined to allow for flexible handling depending on the size and condition of the business's assets: Standard procedures and simplified procedures.
Processing time for a petition to apply for ordinary bankruptcy proceedings.
For businesses with complex asset structures, the time required for the bankruptcy process is calculated in detail through each stage of the proceedings. Below is a summary table of key milestones in the initial phase:
| Implementation phase | The specified deadline | Responsibility for implementation |
|---|---|---|
| Assignment of Judges to Handle the Case | 2 working days from the date of receiving the application | Chief Justice of the Court |
| Notify the business that is required to comply. | 2 working days from the date of assignment | Judge |
| Businesses submit feedback. | 05 working days from the date of receiving the notification | The business was required to |
| Review and make a decision on how to process the application. | 7 days from the date of sending the notification | Judge |
| We request a review of the application's return. | 3 working days from the date of receiving the decision | The applicant |
Please note that the above timelines are calculated based on administrative working days, excluding weekends and public holidays. Delays at any stage may result in an extension of the total case resolution time. For a better understanding of specific cases, please refer to the detailed information below. business bankruptcy here.
After passing the processing stage, the procedure will continue with the following steps:
- The process of assigning judges to handle cases: Ensuring impartiality and specialization from the outset.
- Notification period for the requested business: Ensuring the business's right to know and its right to self-defense.
- Timeframe for businesses to submit feedback: This is an opportunity for businesses to demonstrate their financial status or object to the bankruptcy petition if there are grounds to do so.
- Processing timeframe: The judge will decide whether the business is eligible to proceed with the bankruptcy proceedings.
- Appeal process for rejected applications: The Chief Justice has an additional 3 working days to make a final decision, ensuring maximum objectivity.
The time limit for carrying out simplified bankruptcy procedures is stipulated in the new regulations.
The Law on Bankruptcy and Recovery No. 142/2025/QH15 brings a "breath of fresh air" with streamlined procedures, helping to quickly resolve simple cases. Key points regarding time include:
- Conditions for applying the simplified procedure: Within 10 days of receiving the application, the judge must issue a decision to apply this procedure if the case falls under the category of small or micro-enterprises, or those with no remaining assets, as per Article 70.
- Advantage in implementation time: A special feature of the new law is that the time limit for completing the entire simplified procedure is only half the time compared to the normal procedure.
- Expedited bankruptcy declaration within 30 days: For businesses that have absolutely no assets or insufficient assets to cover bankruptcy costs, the court has the right to declare bankruptcy within 30 days of receiving the case.
Key milestones after bankruptcy proceedings begin
Once the court has decided to open proceedings, the corporate bankruptcy process enters the enforcement and supervision phase. Key activities include:
- Post-procedure monitoring: According to Article 42, all business transactions will be closely monitored by the Receiver to safeguard the assets of creditors.
- Timeframe for holding creditors' meetings and developing a recovery plan: This timeframe is usually flexible, depending on the number of creditors and the feasibility of the business recovery plan proposed by the company.
- Asset liquidation and distribution: This is usually the most time-consuming stage, requiring seamless coordination between the civil enforcement agency and the receiver.
Practical factors affecting the total duration of bankruptcy
Although the law is very clear, in practice, the time it takes for a business bankruptcy process can be prolonged due to the following objective and subjective reasons:
- Intense disputes and claims have arisen between groups of creditors regarding the priority order of payment.
- The process of supplementing documentation to prove debt status is often delayed due to a lack of cooperation from the company's accountants.
- The process for valuing specialized or illiquid assets such as disputed land use rights or patents without a market.
- There is a lack of coordinated efforts between receivers and relevant government agencies regarding the recovery of seals and tax identification numbers.
Conclusion regarding the total time of the business bankruptcy process.
In summary, the total time taken to complete a bankruptcy procedure will vary significantly depending on the type of procedure:
- Estimated time for the expedited procedure: The entire process can be completed very quickly in about 1 to 2 months.
- Estimated time for a typical procedure: The initial phase (from application submission to opening proceedings) takes approximately 1-2 months; however, recovery or liquidation steps can take from 6 months to over 1 year depending on the complexity.
- Note regarding effective date: All activities from March 1, 2026 onwards must strictly comply with Law No. 142/2025/QH15.
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Content is moderated by: Mr. Le Hoang Tuyen – Founder & CEO of Man, CPA Vietnam Auditors With over 30 years of experience in accounting, auditing, and financial consulting...
Source: Articles 39, 70 and 71 of the Law on Bankruptcy and Recovery No. 142/2025/QH15 of the National Assembly of Vietnam.
