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LEGAL Q&A: ENTITLEMENT FOR RECLAIMING COLLATERAL
LEGAL Q&A: ENTITLEMENT FOR RECLAIMING COLLATERAL
Q: Dear Lawyers, I have a timber dealer and sawmill. I have two lumber storage warehouses, currently mortgage a wooden warehouse to the bank to borrow VND 2 billion. Currently, because of Coivd 19 epidemic, I did not have time to import wood, so I had to take the wood in the mortgaged warehouse to sell to local carpentry workshops. Due to the upcoming repayment period while i don’t have money enough for the bank to pay my debt, so I have a question that If I can't pay my debts and the bank wants to disposal my warehouse, will the bank have the right to reclaim the timber I sold?
A: Hi! Regarding your case, Gattaca Law would like to advise as follows:
In this case, he mortgaged collateral which is a timber storage to the bank.
According to the Article 321.4 of the Civil Code 2015 on the rights of the mortgagor, “When a warehouse is mortgaged, the mortgagor may substitute goods in the warehouse but must ensure the value of the goods in the warehouse remains the value agreed”. Therefore, in this case, he needs to balance and replenish the amount of wood in the warehouse so that he still ensures according to the conditions of the signed agreement between the two parties.
At that time, the timber which you sold will be reclaimed by the bank. According to the Article 7.2 of Decree 21/2021/ND-CP, the secured party will not have the right to remance if “Mortgaged properties that have been sold, replaced or exchanged according to Article 321.4 of the Civil Code”. Therefore, the bank does not have the right to reclaim the timber you sold.
This is GATTACA LAW's advice on the right to rem reclaim collateral. For detailed advice and support, please contact:
Gattaca Law Firm
Address: 32 Nguyen Dinh Hoan, Nghia Do, Cau Giay, Ha Noi
Hotline: 0243.204.1777 – 090.17.63.379
Website: gattacalaw.vn
Director – Dr. Nguyen Thanh Nam
Q: Dear Lawyers, I have a timber dealer and sawmill. I have two lumber storage warehouses, currently mortgage a wooden warehouse to the bank to borrow VND 2 billion. Currently, because of Coivd 19 epidemic, I did not have time to import wood, so I had to take the wood in the mortgaged warehouse to sell to local carpentry workshops. Due to the upcoming repayment period while i don’t have money enough for the bank to pay my debt, so I have a question that If I can't pay my debts and the bank wants to disposal my warehouse, will the bank have the right to reclaim the timber I sold?
A: Hi! Regarding your case, Gattaca Law would like to advise as follows:
In this case, he mortgaged collateral which is a timber storage to the bank.
According to the Article 321.4 of the Civil Code 2015 on the rights of the mortgagor, “When a warehouse is mortgaged, the mortgagor may substitute goods in the warehouse but must ensure the value of the goods in the warehouse remains the value agreed”. Therefore, in this case, he needs to balance and replenish the amount of wood in the warehouse so that he still ensures according to the conditions of the signed agreement between the two parties.
At that time, the timber which you sold will be reclaimed by the bank. According to the Article 7.2 of Decree 21/2021/ND-CP, the secured party will not have the right to remance if “Mortgaged properties that have been sold, replaced or exchanged according to Article 321.4 of the Civil Code”. Therefore, the bank does not have the right to reclaim the timber you sold.
This is GATTACA LAW's advice on the right to rem reclaim collateral. For detailed advice and support, please contact:
Gattaca Law Firm
Address: 32 Nguyen Dinh Hoan, Nghia Do, Cau Giay, Ha Noi
Hotline: 0243.204.1777 – 090.17.63.379
Website: gattacalaw.vn
Director – Dr. Nguyen Thanh Nam
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