The regulations on personal bankruptcy in the Shenzhen Special Economic Zone In China and reference values for Vietnam

Abstract

Alongside the high growth rate of the socialist-orientated market economy in Vietnam, the diversification and prevalence of personal consumption and investment activities have been increasing. Consequently, the phenomenon of individuals incurring losses and accumulating debt,  resulting in insolvency or bankruptcy, is inevitable, which leads to a growing personal debt crisis, becoming a significant risk and challenge to socio-economic stability. Meanwhile, the 2014 Law on Bankruptcy of Vietnam only regulates enterprises and cooperatives, not individuals, and currently there is no legal framework for personal bankruptcy. Therefore, the enactment of a personal bankruptcy law is necessary to help individuals recover from insolvency and to re-establish a new cycle in the economy, aligning with the realities of Vietnam’s market economy. This paper examines the personal bankruptcy regulations in Shenzhen and identifies applicable insights for Vietnam.