L.V.H.A and L.V.H.P, residing in Tay Ho commune, Da Nang, lost both their parents, Le Ngoc Tuan and Ngo Thi Thanh, in an electrocution accident in late July.

At the time of their passing, the children's parents still had an outstanding loan of approximately VND 1.7 billion with Sacombank's Quang Nam branch, which included credit card debt. The family home served as collateral for this loan, which had subsequently become overdue. Both children are still of school age and have no income.

Recognizing their difficult circumstances, the bank announced late on 23/8 that it would waive all debt obligations for Mr. Tuan and Mrs. Thanh. Furthermore, it committed not to seize the collateralized house, ensuring the two children would retain their home.

Nguyen Van Sam, Director of Sacombank's Quang Nam branch, stated that the decision aims to share their loss and help the children stabilize their lives and continue their education. This was a special case, thoroughly reviewed by the bank after a comprehensive assessment of the children's situation.

Current regulations do not stipulate that loans are automatically waived when a customer dies. According to the Civil Code 2015, heirs are responsible for fulfilling the financial obligations of the deceased, but only within the scope of the inherited estate.

For loans with collateral, banks typically have the right to seize these assets as per agreements and regulations to recover outstanding debt. The bank's decision to waive all debt obligations and not seize the mortgaged house is a case-by-case determination, not an automatic policy when a customer passes away.

If a loan is insured and the insurance coverage remains active, the insurance company would pay a benefit amount according to the contract. This amount is generally used to settle part or all of the outstanding debt with the bank. However, Sacombank confirmed that while the parents' loan was initially insured, premium payments stopped after the first year.

Quynh Trang