Property obligations left by the deceased, from outstanding bank loans and unpaid taxes to a half-paid home purchase contract, often worry heirs more than the division of the estate itself. Dividing the estate before settling debts, or paying them in the wrong order, can drag heirs into disputes with creditors and even force them to cover the shortfall with their own assets.
Your parents passed away leaving a house in Vietnam with a mortgage attached: must you repay the entire debt, even when it exceeds the value of the house? Does disclaiming the inheritance free you from every debt? And if you live abroad, who will deal with the bank and the creditors on your behalf? Most heirs only start asking these questions when a demand letter is already on the table, yet the law gives clear answers, often more favorable to heirs than commonly assumed, but only if you follow the right sequence. This article analyzes the rules applicable in 2026, the order in which obligations must be settled, and the real-world mistakes that cost heirs the most.
Property obligations left by the deceased and the limit of liability within the estate
When a person dies, their property obligations do not simply disappear. Bank loans, personal debts, unpaid taxes, compensation liabilities, outstanding support payments, and payment obligations under ongoing contracts: all of them survive and must be performed out of the assets the deceased left behind. Under Article 614 of the Civil Code 2015, from the moment the inheritance opens (the time the property owner dies), heirs acquire both the property rights and the property obligations left by the deceased. In other words, the right to inherit and the responsibility for the debts arise at the same time; an heir cannot simply pick the "sweet" part.
The crucial point, and the one heirs most often misunderstand, lies in the limit of this liability:
What does this mean for you? Your responsibility for the deceased's debts is capped within the estate. If your father left an estate worth VND 3 billion but total debts of VND 5 billion, you only use the 3 billion from the estate to pay. No one can force you to cover the remaining 2 billion out of your own pocket, whether you are a child or the spouse of the deceased. Your personal assets, in Vietnam or abroad, remain entirely beyond the creditors' reach. The only exception is where you voluntarily agree to take on the repayment; the law respects that commitment.
One further note: under Article 612 of the Civil Code 2015, the estate comprises the deceased's separate property and the deceased's share in property owned jointly with others. Even a person who is not an heir but receives assets under a will, or a beneficiary of a testamentary gift, is not exempt: Clause 4 of Article 615 and Clause 3 of Article 646 require them to perform obligations in proportion to what they receive when the estate is insufficient to cover the debts.
Separating the deceased's own debts from the joint obligations of husband and wife
Before the "estate" available for debt payment can be calculated, there is a step families often skip: carving the deceased's share of assets and obligations out of the couple's common property. This is a major source of disputes, especially when creditors demand the entire debt from the surviving spouse, or, conversely, the children claim a share of property that belongs to the surviving parent.
The same applies to debts. For the joint property obligations of husband and wife under Article 37 of the Law on Marriage and Family 2014 (for example, a loan signed by both spouses, or taken out by one spouse to meet the family's essential needs), the surviving spouse remains jointly liable for his or her own share; only the deceased's share of the obligation becomes a debt payable from the estate. By contrast, separate obligations under Article 45 (such as debts incurred before the marriage, or debts from transactions one spouse entered into for purposes unrelated to the family) are payable only from that person's estate, and creditors have no right to demand payment from the surviving spouse.
A common example: the husband borrowed VND 2 billion in his own name for a business that was the family's main source of income, then passed away suddenly. That is most likely a joint debt: the wife bears her own share, while the husband's share is deducted from the estate. But if the loan served personal purposes unrelated to the family, the wife may refuse to pay anything beyond her husband's estate. In each case, the line between joint and separate debt turns on the evidence of how the borrowed money was used, and this is precisely where creditors and heirs fight hardest.
Settling obligations before dividing the estate and the statutory order of priority
The safest principle for heirs: settle the obligations first, divide the estate later. In practice, a sound sequence usually runs as follows:
- Make an inventory of the estate and a list of obligations: review ownership certificates, savings books, loan agreements, bank statements, tax notices and ongoing contracts. The estate administrator is obliged to draw up an inventory of the estate under Article 617 of the Civil Code 2015.
- Hold a meeting of the heirs under Article 656: agree on who administers the estate, who distributes it and how matters will be handled; every agreement must be made in writing. An heir living abroad may authorize a lawyer in Vietnam to participate and is not required to attend in person.
- Separate the spouses' joint and separate debts as analyzed above, and determine the actual value of the estate available for payment.
- Pay the obligations strictly in the order of priority set out in Article 658.
- Only what remains after payment goes into the declaration and division of the estate at a notary organization under the procedures of the Law on Notarization 2024.
Article 658 of the Civil Code 2015 requires the property obligations and inheritance-related expenses to be paid in the following order: (1) reasonable funeral costs in line with customs; (2) outstanding support payments; (3) costs of preserving the estate; (4) allowances for dependants who lived with the deceased; (5) wages; (6) compensation for damage; (7) taxes and other amounts payable to the state budget; (8) other debts owed to individuals and legal entities; (9) fines; (10) other expenses. Each item must be paid in full before moving to the next. "Skipping ahead" to pay the creditor who applies the most pressure while ignoring a higher-priority item invites claw-back claims.
Heirs should also know how long creditors have to make their claim:
Three years run from the date the deceased passed away, not from the date the estate division is completed. For creditors, suing after this deadline risks losing the claim if the other side invokes the time bar. For heirs, the same period calls for caution: having received the estate, you can still be required, within those three years, to perform obligations up to the value of your share.
A note specific to 2026: from 1 July 2026, the Law on Tax Administration 2025 and the Law on Civil Judgment Enforcement 2025 take effect, replacing the current laws. From that date, the procedures for completing a deceased person's tax obligations and for enforcing judgments against obligations left by the deceased will follow the new rules. The foundational principle of the Civil Code 2015, liability only within the estate, does not change, but files straddling this date should have their procedural steps re-checked with the tax and enforcement authorities.
Legal risks and common mistakes in practice
The most widespread mistake is believing that "you must disclaim the inheritance to escape your parents' debts". An heir's liability is already capped within the estate, so there is no need to disclaim in order to "escape" the deceased's debts; the law never forces you to pay more than you receive. Disclaiming truly matters only when you want nothing to do with a complicated estate, and the right has clear limits:
In other words: if you personally owe money and disclaim the inheritance so that those assets cannot be seized to pay your own creditors, the disclaimer can be declared void. This is a legal shield for creditors, and the point where many heirs who try to "game" the system lose in court.
The second mistake: divide first, pay later. Co-heirs rush to declare and divide the estate before reviewing all obligations, only for the bank or a private creditor to surface months later with a fully signed loan agreement. At that point, under Clause 3 of Article 615, each heir performs the obligation in proportion to, but not exceeding, what they received. That sounds safe, but in practice it sets off a chain of trouble: one heir has already sold the share they received, another lives abroad and cannot return to deal with it, another refuses to contribute. What began as the simple payment of one debt turns into a dispute among the co-heirs themselves. For heirs living abroad, there is a further risk: the co-heirs in Vietnam may settle and divide everything among themselves without asking, and by the time you learn of it, the estate has already shrunk considerably.
The third mistake: overlooking obligations under contracts still being performed. DEDICA sees this regularly with foreign clients: the deceased was buying an apartment in Vietnam on a payment schedule and had paid only part of the price before passing away. The heirs abroad inherit both the rights and the obligations under that sale contract. Failing to respond to the developer on time can mean late-payment interest, contractual penalties, even termination of the contract and the loss of a significant part of the money already paid. Acting early, by contrast, usually leaves heirs two options: continue performing the contract to take the property, or negotiate a termination and recover the amounts already paid, the route most clients abroad choose.
The fourth mistake: setting aside estate assets for ancestor worship or testamentary gifts before the debts are cleared. The instinct to "reserve a part for the family altar" is common, but Clause 2 of Article 645 of the Civil Code 2015 is explicit: if the entire estate is insufficient to discharge the deceased's property obligations, no part of it may be set aside for worship. The same goes for testamentary gifts: where the estate cannot cover the debts, the gifted portion must be used to perform the remaining obligations (Clause 3, Article 646). Creditors are fully entitled to demand that these portions be applied.
DEDICA's role in handling estates that come with property obligations
The hardest part of these cases is not understanding the law; it is building a complete picture of the estate and its obligations, then handling them in the right order, especially when the heir lives abroad and cannot return to Vietnam to pursue the procedures. DEDICA helps clients review and verify all assets and debts of the deceased; separate the spouses' joint and separate debts; and design an overall plan, from settling obligations and declaring the estate to repatriating the outcome. For clients abroad, DEDICA's lawyers act under a power of attorney to deal directly with banks, developers, tax authorities, notary organizations and creditors; the client does not need to be present in Vietnam at any stage.
Where disagreements arise among co-heirs or with creditors, DEDICA represents clients in negotiations; if litigation becomes unavoidable, our lawyers act in the court proceedings and follow the case through judgment enforcement so that the client actually receives their share of the estate. If you are facing an estate that comes with unclear debts, have a lawyer review it before you sign anything.
Conclusion
Performing the property obligations left by the deceased in Vietnam follows a clear sequence: (1) separate the couple's common property and joint versus separate debts to determine the true estate; (2) make a full inventory of the estate and all obligations; (3) pay strictly in the order of priority under Article 658, from funeral costs, support and estate preservation through to taxes and ordinary debts; (4) only the remainder is declared and divided at the notary; (5) always remember that an heir's liability is limited to the estate and never reaches personal assets unless voluntarily assumed. Three things to avoid: do not disclaim the inheritance merely to "dodge" the deceased's debts, as it is unnecessary and can be ineffective; do not divide the estate before reviewing every obligation, because creditors have 3 years to claim; and do not ignore contracts the deceased was still performing, above all off-plan home purchase contracts. If you are abroad, the first step is to authorize a lawyer in Vietnam to review the estate and its obligations before you sign any declaration of acceptance.
Every estate has a different mix of assets and obligations; one misclassified debt can change the entire outcome. DEDICA Law Firm stays with you from verifying assets and reconciling debts to dealing with creditors, until your share of the estate actually reaches you, even when you cannot be present in Vietnam. Send DEDICA the list of assets and debt documents you currently have, and our lawyers will give an initial assessment and propose a plan for your specific case.
This article is for general reference, based on the laws in force at the time of writing. Every case has its own facts; please consult DEDICA's lawyers for advice tailored to your situation.
