Connect with us

Thai Life

Law, Life and Society: Collecting unpaid debt in Thailand

Legacy Phuket Gazette

Published 

 on 

PHUKET: With the Thai economy stagnating, household debt is reaching record levels. According to the University of the Thai Chamber of Commerce, the average household debt reached nearly 300,000 baht in 2016. This amount is higher than the annual income of the average Thai family.

In case of default, the first thing is to ensure that the loan is enforceable.

Title IX, Chapter II of the Civil and Commercial Code outlines the requirements for consumer loans. A loan exceeding 2,000 baht must be written and signed by the borrower. Repayment or cancellation of loans exceeding that can only be proven with a document signed by the borrower.

A loan for a movable property is covered by Title XIII, Chapter I of the Civil and Commercial Code. These require a written agreement outlining the obligation for performance of the loan with interest, compensation in case of non-performance, and requirements to preserve the pledged property. If the debtor defaults, the creditor must first notify the debtor in writing.

The code does not require a written agreement for contractors. If the contractor has completed any part of the work, the employer is liable for the completed part. It is still recommended that the parties have a paper agreement outlining the rights and obligations of each party; otherwise an employer can cancel the job as long as he compensates the contractor for loss.

The creditor should also review the statute of limitations on attempting to collect a debt. Most debts have a limitation of 10 years but some claims are limited to two or five years. After the time limit has passed, the debtor can legally refuse to pay.

If the debtor has defaulted, the creditor should try to mitigate losses before filing a lawsuit. It might be better to negotiate a partial or extended payment plan to avoid litigation. If negotiation does not lead to an agreement, the creditor can choose to litigate. Some claims require that the creditor should serve a demand letter outlining the claim and requesting payment within a reasonable time period.

If the demand letter is ignored, the creditor can file a lawsuit. The attorney needs to review the information and history of the dispute to ensure that a lawsuit is plausible and reasonable. If the debtor has the ability to pay or owns property that can be held in lieu of financial payment, then it may be reasonable to pursue litigation.

The lawsuit begins with the filing of a claim with a court. The place of filing will depend on the value or type of debt. After filing the claim, the court will generally require the parties to go to mediation. A mediator will attempt to push the parties to come to an agreement. If that fails, the court will consider the evidence and make a judgment. If the debtor does not comply with the judgment, the creditor can request a writ of execution to force the seizure or auctioning of the debtor’s property.

The process of filing a lawsuit is time consuming and expensive. It is better to negotiate and avoid litigation, considering the value of litigation in respect to the possible gain.

Robert R Virasin is a licenced US Attorney and managing director of Virasin & Partners. Yutthachai Sangsirisap is a licensed Thai Attorney. They can be reached at info@virasin.com or at their website www.vir asin.com.

— Robert R Virasin

 

Want more Thailand news from the Thaiger family?

📱 Download our app on Android or iOS for instant updates on your mobile
📝️ Join the conversation on Thaiger Talk - discuss news & life in our Thailand forums
📧 Subscribe to our daily email newsletter
👍 Like/Follow us on Facebook
🔔 Subscribe to or Join our YouTube channel for daily video updates

image

Join the conversation and have your say on Thailand news published on The Thaiger.

Thaiger Talk is our new Thaiger Community where you can join the discussion on everything happening in Thailand right now.

Please note that articles are not posted to the forum instantly and can take up to 20 min before being visible. Click for more information and the Thaiger Talk Guidelines.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Follow Thaiger by email:

Protests3 mins ago

Gathering for 89th anniversary of constitutional monarchy

Crime22 mins ago

Police arrest suspect who allegedly killed Covid patient and 7-Eleven clerk

Coronavirus (Covid-19)57 mins ago

Multiple Bangkok hospitals stop Covid testing, citing fear of insufficient beds

Phuket Sandbox July 1st

days
hours
minutes
seconds

Thaiger is getting behind local businesses for the restart of tourism in July - up to 50% discounts across all advertising packages in June!

Pattaya1 hour ago

Chon Buri governor says Pattaya bars will stay closed for now, Covid cases remain high

Crime2 hours ago

15 year old stabbed at private school

Thailand2 hours ago

UPDATE: Police identify alleged gunman who opened fire at field hospital, killing a patient

Thailand3 hours ago

PM orders investigation into pricey street lamps

Best of3 hours ago

Top 5 Thai Restaurants in Bangkok

Phuket4 hours ago

Phuket governor outlines plans to track and trace foreign arrivals

Coronavirus (Covid-19)4 hours ago

Thursday Covid Update: Latest wave exceeds 200,000 cases

Thailand4 hours ago

Guitarist from “Playground” dies in road incident

Coronavirus (Covid-19)4 hours ago

First delivery of Sinopharm vaccines approved for distribution

Thailand4 hours ago

Good Morning Thailand | Thai Immigration – Are you legal? Latest Covid and Phuket sandbox

Phuket4 hours ago

Flight traffic to Phuket expected to increase by 6% next month

Tourism5 hours ago

Hotel platform predicts increasing demand for holidays in Thailand

Thailand4 months ago

Thailand News Today | Thai Airways in rehab, All go for Songkran | March 4

Tourism4 months ago

Phuket’s nightlife. Yes, bars and clubs are still open | VIDEO

Phuket4 months ago

Thailand News Today | Covid passport talks, Thai Airways heads to court | March 2

Tourism4 months ago

Phuket Thai food treats you need to try | VIDEO

Thailand4 months ago

Thailand News Today | Bars, pubs and restaurants ‘sort of’ back to normal | Feb 23

Tourism4 months ago

In search of Cat & Dog Cafés in Phuket Town | VIDEO

Thailand5 months ago

Thailand News Today | Gambling crackdown, Seafood market to reopen, Vlogger challenge | Jan 21

Thailand5 months ago

Thailand News Today | Covid testing for visas, Business impact, Vaccine approval | January 19

Thailand5 months ago

Thailand News Today | Weekend Bangkok bombs, Thailand fires, Covid update | January 18

Thailand5 months ago

Thailand News Today | Stray car on runway, Indonesian quake, 300 baht tourist fee | January 15

Thailand5 months ago

Thailand News Today | Governor off respirator, sex-trafficking arrest, condo prices falling | January 14

Thailand5 months ago

Thailand News Today | Chinese vaccine, Thailand ‘drug hub’, Covid update | January 13

Thailand5 months ago

Thailand News Today | Bangkok may ease restrictions, Phuket bar curfew, Vaccine roll out | January 12

Thailand5 months ago

Thailand News Today | Covid latest, Cockfights closed down, Bryde’s Whale beached | January 11

Thailand6 months ago

Thailand News Today | Southern floods, Face mask fines, Thai Air Asia woes | January 8

Trending