Controlling financial obligations and protecting priority of payment in credit contract disputes

This study examines two groups of shortcomings in the adjudication of credit contract disputes at the People’s Court of Region 4, Ho Chi Minh City: the determination and control of financial obligations once a debt becomes overdue, including debt composition, interest-on-interest issues, and the order of debt collection; and the protection of priority of payment when collateral is enforced. Using a case-study approach based on four judgments and cassation decisions issued between 2023 and 2025, together with testing of the proposed models, the study identifies fragmented technical rules in sub-statutory legal documents and the absence of operational support tools as common causes of these shortcomings. Testing of the dual-verification and interest-evidence transparency model resulted in recalculated total payment obligations that were 43.9% and 83% lower in two cases. A unified priority-of-payment protection model is also proposed to ensure proper application of the priority order under Article 308 of the 2015 Civil Code. The study recommends a 12-month pilot involving three operational support tools.