Asset Distribution of a Bankrupt Credit Institution in VN

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After a credit institution is declared bankrupt, its assets are managed, liquidated and distributed under the Law on Recovery and Bankruptcy 2025 (No. 142/2025/QH15), effective from 01/03/2026 (replacing the Law on Bankruptcy 2014). Note that the correct term is “assets”, not “estate” — “estate” is a term of inheritance law, not used in bankruptcy proceedings.

1. Who has the right and obligation to file a petition to open bankruptcy proceedings against a credit institution?

Under Clause 1, Article 72 of the Law on Recovery and Bankruptcy 2025, after the State Bank of Vietnam issues a document terminating special control or not applying/terminating the application of solvency recovery measures while the credit institution remains insolvent, the subjects with the right and obligation to file a petition requesting the application of bankruptcy proceedings include: agencies, organizations and individuals prescribed in Clauses 1, 3 and 4 of Article 38 of the Law (creditors, employees, persons with related rights/obligations); the credit institution has the obligation to file a petition — where the credit institution fails to file, the State Bank of Vietnam files the petition requesting the application of bankruptcy proceedings against that credit institution. This is a distinctive feature compared to ordinary enterprises, as credit institutions are subject to the special management of the State Bank.

2. When is a petition to open bankruptcy proceedings against a credit institution accepted?

The Court accepts the petition when the State Bank of Vietnam has issued a document terminating special control or not applying/terminating the application of solvency recovery measures while the credit institution remains insolvent (Clause 2, Article 72). Within 10 days from the date of acceptance, the Judge must issue a decision to open bankruptcy proceedings against the credit institution (Clause 3, Article 72).

3. How are the assets of a bankrupt credit institution distributed?

The credit institution must repay special loans in accordance with the law on credit institutions before distributing assets (Clause 5, Article 72). The distribution of asset value follows the order in Clause 6, Article 72: bankruptcy costs; wage debts, severance allowances, and employees’ social and health insurance and other benefits under labor contracts and collective labor agreements; deposits and amounts the deposit insurance organization must pay to depositors at the bankrupt credit institution under the law on deposit insurance; financial obligations to the State; unsecured debts payable to creditors on the creditor list; and secured debts that remain unpaid because the collateral value is insufficient to pay the debts. The remainder (if any) belongs to members, owners or shareholders depending on the credit institution type.

Notes on applying current legal provisions

This article is for reference, helping readers understand the legal issue at a general level. The Law on Recovery and Bankruptcy 2025 is effective from 01/03/2026; dossiers arising before this date apply the transitional provisions. Where advice is needed, readers should contact ANT Legal’s lawyers at 0966.475.966 for verification and advice before proceeding.

Common risks to note

Using the term “estate” instead of “assets” in bankruptcy proceedings.
Applying the expired Law on Bankruptcy 2014.
Overlooking the roles of the State Bank and deposit insurance.
Not following the payment priority order when distributing assets.

How can ANT Legal help?

ANT Legal advises on credit institution bankruptcy procedures and protects the rights of creditors, depositors and employees under the Law on Recovery and Bankruptcy 2025. For quick advice, you may contact our lawyers at 0966.475.966.

Frequently asked questions

After a credit institution is declared bankrupt, in what order are assets distributed?
Under Clause 6, Article 72 of the Law on Recovery and Bankruptcy 2025: bankruptcy costs; wage debts, severance allowances and employees’ social and health insurance; deposits and deposit insurance amounts payable to depositors; financial obligations to the State; unsecured debts; secured debts remaining unpaid; the remainder belongs to members, owners or shareholders.

Who is obligated to file a petition to open bankruptcy proceedings against a credit institution?
The credit institution has the obligation to file a petition; where it fails to file, the State Bank of Vietnam files the petition requesting the application of bankruptcy proceedings against that credit institution (Clause 1, Article 72 of the Law on Recovery and Bankruptcy 2025).

Are the “estate” of a bankrupt credit institution distributed like an inheritance estate?
No. “Estate” is a term of inheritance law; in bankruptcy proceedings the term “assets” must be used, which are managed, liquidated and distributed under the Law on Recovery and Bankruptcy 2025.

Legal Knowledge

Distribution of a Bankrupt Credit Institution’s Assets