Private lender - both Thais - what's the law?

[PaulieAUS]

Hi there,

I am asking if anyone knows what the situation is when one Thai person (my ex-wife) lends money to another Thai person (her friend).

 

They signed a private contract which states she was the lender and he was the borrower and had to pay it back by a certain date. 

 

If he fails to pay what are her options for debt recovery? I would have thought zero because it's a private contract gone sour. Does anyone know what the law is in Thailand?

 

I am not involved obviously. We've all heard stories about lending Thais money gone sour but in light of that, this should be a private contract right so she's pretty much got no hope of getting any money back? Can a Thai person bankrupt another citizen?

 

Thanks for your insight in advance !  

 

I should add that the loan is unsecured.

Edited June 15, 2020 by PaulieAUS
Addition

[PatOngo]

11 minutes ago, PaulieAUS said:

I am not involved obviously.

Very wise Paulie!

[PaulieAUS]

I am still curious as to what the law is.

 

If a farang was involved they'd get totally screwed but what if a Thai lends to another Thai?

[BritManToo]

33 minutes ago, PaulieAUS said:

Can a Thai person bankrupt another citizen?

Yes, but that still doesn't recover any money.

Just costs you more for the court fees.

[stubuzz]

Private loans can given using the house as collateral. It can be done at the Land office and failure to repay will get you legal ownership of the house.

 

[Kwasaki]

48 minutes ago, PaulieAUS said:

I should add that the loan is unsecured.

There's your answer.

[PaulieAUS]

It's an unsecured loan, only in Thailand.

 

Family friend and all that. She won't be seeing a cent back but my question was, how can she enforce anything? If she makes him bankrupt then what. Jail time? What's the outcome? This is all very laughable to me.

[holy cow cm]

18 minutes ago, PaulieAUS said:

It's an unsecured loan, only in Thailand.

 

Family friend and all that. She won't be seeing a cent back but my question was, how can she enforce anything? If she makes him bankrupt then what. Jail time? What's the outcome? This is all very laughable to me.

What is the amount of the loan? Are you talking:

-thousands?

-hundreds of thousands?

-Million - Millions?

[PaulieAUS]

1 hour ago, holy cow cm said:

What is the amount of the loan? Are you talking:

-thousands?

-hundreds of thousands?

-Million - Millions?

1.65 million baht

 

Family friends (not relatives), known each other for 20 years.

 

 

[holy cow cm]

9 minutes ago, PaulieAUS said:

1.65 million baht

 

Family friends (not relatives), known each other for 20 years.

 

 

So if not lent already set it up against collateral or what it is being used for or against something solid like a house or a car. If already lent then this is really not a smart thing regardless of how good the friend is. Especially here. Really needs an attorney's advice. 

[Bob A Kneale]

2 hours ago, PaulieAUS said:

Can a Thai person bankrupt another citizen?

Yes, that can be done through the Central Bankruptcy Court for personal debts of more than B1m.  Bankruptcy doesn't incur jail time.

[PaulieAUS]

9 minutes ago, holy cow cm said:

So if not lent already set it up against collateral or what it is being used for or against something solid like a house or a car. If already lent then this is really not a smart thing regardless of how good the friend is. Especially here. Really needs an attorney's advice. 

It's not my problem as we are no longer married but I suspect quite a few Thai women are in loads of debt so I want to make sure I ask this question upfront. The last thing I want to be saddled with someone being sued or suing.

 

The paperwork said no underlying security. They are Thai's after all.

 

 

[holy cow cm]

2 hours ago, PaulieAUS said:

It's not my problem as we are no longer married but I suspect quite a few Thai women are in loads of debt so I want to make sure I ask this question upfront. The last thing I want to be saddled with someone being sued or suing.

 

The paperwork said no underlying security. They are Thai's after all.

 

 

Hopefully the person is a true good close friend. Otherwise ignorant. Thai men and women are duped everyday so nothing new. Anyway good luck to her.

[Andy from Kent]

I always thought it best to avoid lending money to friends unless you ultimately want one less friend.

[1FinickyOne]

I have seen the hua-na [village chief] get involved and try to mediate these types of disputes... of course, simple answer comes back that you can't get blood out of a stone... 

[Lacessit]

She loaned 1.65 million baht without any form of security over the loan? You certainly did not marry her for her brains.

If there is a contract in writing signed by both parties, a lawyer MAY be able to get some recovery. If the borrower has no assets to go after, tell her to forget it.

[PaulieAUS]

52 minutes ago, Lacessit said:

She loaned 1.65 million baht without any form of security over the loan? You certainly did not marry her for her brains.

If there is a contract in writing signed by both parties, a lawyer MAY be able to get some recovery. If the borrower has no assets to go after, tell her to forget it.

Family friends I guess. I've seen this happen quite a bit in Thailand, just wasn't clued up on debt recovery between private citizens. I would highly doubt one could be jailed over failing to pay back to a citizen irrespective of what was signed. 

[blackcab]

If payment is not forthcoming the only way forward is to take the matter to Civil Court. Your ex wife would have to pay for this.

 

Should the debtor wish to, they can appeal the matter as far as the Supreme Court. Your ex wife would have to pay for this.

 

Eventually, when final judgement is passed, the debtor might not pay. Your ex wife would have to apply to have the judgement executed. Your ex wife would have to pay for this.

 

At this point, if the debtor has no assets, your ex wife can apply to make the debtor bankrupt as the debt is in excess of 1 million baht. Your ex wife would have to pay for this.

[Andyfez]

Jail isn't usually considered in such matters.

Police will be reluctant to get involved unless there's a crime.

If there's no collateral, then little hope of recovery. Most people who lend will take land papers until it's paid.

If he really hadn't got the money then a court case would be superfluous .

[Grusa]

There is a section of society here who specialise in collecting unpaid debts. The consequence of non-payment is dire, involving lead, concrete and oil drums.

 

Not condoning, just  saying.

[worgeordie]

A lot of Thai's look on loans as gifts and never pay them back.

regards Worgeordie

Edited June 16, 2020 by worgeordie

[Kalasin Jo]

19 hours ago, BritManToo said:

Yes, but that still doesn't recover any money.

Just costs you more for the court fees.

Something many don't think about.

 

I know nothing of Thai law really  but for example in the UK you my get a civil court judgement, even with an order the debtor pay interest and the creditor's legal costs but then you have to enforce it. And even if the debtor has cash in the bank a creditor may still need a court order that the bank release it. If no cash I assume a court can order enforcement by seizing and selling assets to the amount of the debt. If he has no assets or all in someone else's name the creditor is stuffed. So it all costs money which in practical terms may not be recoverable even if legally it is.

 

By the way making him bankrupt would be a last resort, is a different process I should think, and will give all his creditors an opportunity to claim reducing what your ex might get. Some may have priority over other creditors too, leaving nothing for the rest after they have been paid.

 

You will have to ask a Thai lawyer and get an idea of fees and costs for the whole process before starting. Also try and find out whether he has the means to pay.

 

Final thought, a lawyer's letter setting out the claim and amount plus an interest calculation and threatening court action may be enough to make him cough up.

[Pedrogaz]

It would be helpful know what the sum of money is. But if it is 1000 pounds or less, your options are pretty much what they are in the UK or US.....that is to forget about it.

 

If it is a large amount of money like 10 million baht, then you have to take the person to court....but if the person has no money to pay what are you going to get? If he has a Lamborghini sitting in his driveway, it is likely to be financed too and the car lender will have priority. So weigh very carefully whether to litigate. 

 

The problem is what to do about the loan in the middle.....say 500,000 to I million baht....there you need to watch the sopranos and have nothing to do with it Paulie.

[BritManToo]

24 minutes ago, Pedrogaz said:

It would be helpful know what the sum of money is

Earlier post says 1.65Mbht ........ around  40,000 pounds or $50,000.

Edited June 16, 2020 by BritManToo

[PatOngo]

20 hours ago, PaulieAUS said:

I am still curious as to what the law is.

 

If a farang was involved they'd get totally screwed but what if a Thai lends to another Thai?

Depends on who has the most influential connections!

[sanuk711]

Did the loan include interest

Was the interest above 15% P/A

If there was no interest, then the interest will be set @ 7.5% P/A

Did a lawyer write up the Agreement

(if so) Is the Agreement a "Pledge Loan"

(If not) What witness are there to the Agreement.

Does the person own a home--(it doesn't matter if there is a bank mortgage or not)

 

I take it although you are divorced -your interest in the outcome is because some of the money come from you.

Unlike a lot of the skeptics on here--I think the (Civil) court system is a lot better than the west. The Criminal side is Woeful.

 

Yes its probably worth starting proceedings, because one of the foremost things they do in Thailand is try to get you not to spend money on a court case.

Divorces, breach of contract and collection of sum of money are among the most common of civil lawsuits filed in Thailand. When these cases are filed in court, the Thai tribunals still aim for a last chance of an out-of court settlement. A preliminary hearing is set not only for the identification of issues, but more importantly for the possibility of a compromise. They will appear before an Adjudicator (sometimes 2) before they reach the court stage.

If they (Adjudicator(s) are telling the respondent(the friend) that the Plaintiff (your wife) has a particularly strong case and will probably win--and asking her (the friend) what defense she has for refusing to pay.  Then a compromise is usually reached......(I'll pay a lesser amount---I'll pay x amount a month..... etc...etc)

 

An agreement directly from her friend may come as soon as the first summons is served. In the time I have lived here I have seen people walk away from Debts and their part of the marital homes. Throwing their arms up saying ....its Thailand--nothing can be done--- and sure enough when they walk away --their absolutely right--nothing was done.

 

 

*FYI__When the Covid started a Newspaper who's name I am not allowed to print or give a link to --done an article on private lending, as they felt it would be rife, I will PM it to you with it & a few other links that I am not to put here.

 

 

 

[Foghorn]

My ex had a similar problem and the lawyer took her money and did a deal with the other party which they didn’t honor and made it impossible to take the matter further, be careful of the lawyer you use , make sure you get a contract with the lawyer

[PaulieAUS]

1 hour ago, sanuk711 said:

Did the loan include interest

Was the interest above 15% P/A

If there was no interest, then the interest will be set @ 7.5% P/A

Did a lawyer write up the Agreement

(if so) Is the Agreement a "Pledge Loan"

(If not) What witness are there to the Agreement.

Does the person own a home--(it doesn't matter if there is a bank mortgage or not)

 

I take it although you are divorced -your interest in the outcome is because some of the money come from you.

Unlike a lot of the skeptics on here--I think the (Civil) court system is a lot better than the west. The Criminal side is Woeful.

 

Yes its probably worth starting proceedings, because one of the foremost things they do in Thailand is try to get you not to spend money on a court case.

Divorces, breach of contract and collection of sum of money are among the most common of civil lawsuits filed in Thailand. When these cases are filed in court, the Thai tribunals still aim for a last chance of an out-of court settlement. A preliminary hearing is set not only for the identification of issues, but more importantly for the possibility of a compromise. They will appear before an Adjudicator (sometimes 2) before they reach the court stage.

If they (Adjudicator(s) are telling the respondent(the friend) that the Plaintiff (your wife) has a particularly strong case and will probably win--and asking her (the friend) what defense she has for refusing to pay.  Then a compromise is usually reached......(I'll pay a lesser amount---I'll pay x amount a month..... etc...etc)

 

An agreement directly from her friend may come as soon as the first summons is served. In the time I have lived here I have seen people walk away from Debts and their part of the marital homes. Throwing their arms up saying ....its Thailand--nothing can be done--- and sure enough when they walk away --their absolutely right--nothing was done.

 

 

*FYI__When the Covid started a Newspaper who's name I am not allowed to print or give a link to --done an article on private lending, as they felt it would be rife, I will PM it to you with it & a few other links that I am not to put here.

 

 

 

No it's a private contract signed between both parties in front of two witnesses. Standard contract apparently with no underlying security or interest terms. The reason being is that they are family friends who have known each other for a long time, they all know each other so just wanted something in writing. I know, all very daft but this is Thailand.

 

Yes the borrower owns a house under a mortgage and I doubt they have paid off much principal.

 

I've just don't think it's possible for a citizen to jail another citizen. How many businesses go under every day? I am sure many people lent money, are owed money, whether under contract or not. If you don't have the money to pay your debts to a person, why bother signing a paper? Different if borrowing from a lending institution but from a person? it's like free money.

 

And no, the lawyer didn't write up anything. It's literally a one-pager you can download. A very basic standard contract (letter more like it) with no bells or whistles.  

 

 

 

 

Edited June 16, 2020 by PaulieAUS
Addition

[Toscano]

Private Lending in Thailand is very unwise , as it it more likely you will never get repaid , don't lend more than you can afford to lose .

In this particular instance a friend of 20 years might repay . Before lending you have to know the details as to what they are borrowing for , do they have a good secure job , or source of income from which to pay you back . Even a personal contract between lender and borrower is really no guarantee that your money will be returned . Thailand doesn't have any concrete legal system you can turn to to recover your money . Legal action will cost you money , but most likely you will never recover your loan .

[PaulieAUS]

3 minutes ago, Toscano said:

Private Lending in Thailand is very unwise , as it it more likely you will never get repaid , don't lend more than you can afford to lose .

In this particular instance a friend of 20 years might repay . Before lending you have to know the details as to what they are borrowing for , do they have a good secure job , or source of income from which to pay you back . Even a personal contract between lender and borrower is really no guarantee that your money will be returned . Thailand doesn't have any concrete legal system you can turn to to recover your money . Legal action will cost you money , but most likely you will never recover your loan .

 

Money was lent to start a food manufacturing business 1st Jan this year and pay off some debts and that business folded due to COVID-19 restrictions. The borrower has run out of funds, closed up shop and the inventory has been sold as well. That person isn't working right now, could be living off the 1.65MB, who knows? But anyway. whether they are lying or not is irrelevant as the money hasn't been paid back and they were meant to pay 100% of the 1.65MB by a certain date (no installments).  It would be quite easy for them to transfer that 1.65MB to family members anyway so there's probably nothing sitting in their bank account right now.

 

As they are family friends, they did engage a mediator to sort it out but the borrower stresses he is dead broke and can't pay anything. He will try to get a job once the pandemic peters out.