Getting into debt seems to be a Thai thing, not least amongst those in my extended family. Nephew is in debt to the tune of over 200,000 baht including a car on 5 year finance. He works, his mother is unable to work but he has never tried to help her. At 28 he has brought it all on his selfish self while I have supported his mum for the last 14 years, when he asks for help I refuse him as he has blatantly refused to support his own divorced mother. his divorced  mum and widowed aunt live together (not with my wife and I) and the aunt. following a work accident that broke her back (no compensation or help of course this being Thailand) is the subject of this request for advice, Her spine is permanently damaged giving her a slight hump and she is incapable of lifting weight. So what little I give monthly helps both women. She got a credit card some years ago and owed 40,000 on it for over 2 years. Her minimum payment is about 2000 baht monthly and is all she can manage from money sent to support both of them. She has a car I bought her ten years ago, no job, no other means of support and the house she lives in is in her sister's  sole name. The total on the card has not reduced in the last 2 years apparently, still circa 40,000 baht in spite of  the 2000 baht paid monthly so already around 48,000 in interest with no reduction in the principle.

 

Now the credit card company have told her the interest rate is going to increase. I only found out about all this today.

 

My advice is transfer the 17 year old car, a Mazda 3, to the sister, so then she has nothing, no assets, no job. and no future. Then stop all payments to the leeches running the credit card. I say - what can they do? Being poor is no crime, having no income is no crime, and the leeches can hardly sue me to continue to give her money. If they sue her it would be a fake victory, they'd have to pay lawyers and court costs and even if awarded to her with zero income she could not pay. 

 

So I say I won't give her more money to give to the greedy and parasitical credit card company so she cannot pay any more. What can they do to her? Comments please - but I think I am right. She can never work and owns nothing so no penalty against her could ever be enforced.

1.  Stop payments: Ethically and strategically sound. She’s paying interest on a debt she’ll never escape.

2.  Transfer the car: Removes the only attachable asset. At 17 years old, it’s likely worth little and may not be worth pursuing.

3.  Let them sue: If they do, it’s a hollow victory. No income, no assets, no enforcement.

4.  Do not co-sign or guarantee: You’re not legally liable unless you’ve signed something. They cannot compel you to pay.

My wife says this (her sister's name is Ann)

What happens if Ann stops paying?
1. They will seize all of Ann's assets if Ann has no assets.
2. The loan company will file a lawsuit against Ann for embezzlement.
3. Ann will be found guilty and will be prosecuted and initially remanded in prison.

Almost certainly there is more debt in this story, probably informal loan at very high interest. 

 

I am calling it.

33 minutes ago, FruitPudding said:

Almost certainly there is more debt in this story, probably informal loan at very high interest. 

 

I am calling it. Incorrectly actually.

 

Just checked - my wife is wrong, debt is a civil and not a criminal matter! Anyone ever tried to change a Thai woman's mind if she insists she is right? 

 

48 minutes ago, cliveshep said:

Just checked - my wife is wrong, debt is a civil and not a criminal matter! Anyone ever tried to change a Thai woman's mind if she insists she is right? 

 

Jail time would be if a court ordered her to pay and she failed to obey the court order.

2 hours ago, cliveshep said:

Just checked - my wife is wrong, debt is a civil and not a criminal matter! Anyone ever tried to change a Thai woman's mind if she insists she is right? 

 

 

Don't try.

Caveat emptor when dealing with Thai relations and money.

 

 

Over the years, I have found that Thai families are like families in most countries, they are very very different - some are close knit, others treat each other like aliens.

 

The money issue seems to be an almost endless "problem" in many families - over spending, over borrowing, all in the name of "face", materialism and consumerism; the antithesis of the Buddha's teachings.

 

Sadly, some people thus never learn, and go from debt, to debt, to debt, often moving to another location of avoid the repercussions of loan sharks, etc.

 

If people are unwilling to accept good financial advice and change their behaviour, then let them suffer.  They may never change.

 

 

 

 

The current Government (and the last one) put into place a number of (laudable) schemes to try to help people escape the kind of debt cycle that is described in the OP. The aim is to give help to those who make moves to help themselves and to keep people away from  informal lending operators. 

The banks and other (legitimate) loan companies have signed up to these schemes , though, from what i have heard, not all banks have been eager to promote  what is available. 

The banks can take advantage of certain Govt/Bank of Thailand benefits when they assist their customers through these schemes, so there is some incentive for them as well.

I would suggest that the OP pushes his family members to find out about what kind of help is available. Probably the best place to start is by having an open and frank  discussion with the banks and/or loan companies involved and see what they suggest.

The Bank of Thailand and others have made efforts to publicise the  help that could be  available , which can involve things such as a reduction of  the principal amount or an interest free period,  but , historically, the take up has been disappointing.

15 hours ago, cliveshep said:

My wife says this (her sister's name is Ann)

What happens if Ann stops paying?
1. They will seize all of Ann's assets if Ann has no assets.
2. The loan company will file a lawsuit against Ann for embezzlement.
3. Ann will be found guilty and will be prosecuted and initially remanded in prison.

That's completely wrong,

They will make her bankrupt through court, not allowed to own property, vehicles, or have a bank account for 5 years, then all over, loan forgiven. She will get a letter asking for the money each year for the duration of her 5 year bankruptcy, that's all.

Query: describe bankruptcy in Thailand

 

AI Overview

 

 

In Thailand, bankruptcy is a court-supervised legal process, primarily initiated by creditors, for the orderly liquidation of a debtor's assets to repay outstanding debts. A key feature is that debtors generally cannot initiate their own bankruptcy proceedings (except for specific corporate liquidation circumstances); only a creditor can file a bankruptcy petition with the Central Bankruptcy Court. 

 

Key Requirements for a Bankruptcy Petition

A creditor can initiate a bankruptcy action if: 

• The debtor is insolvent (liabilities exceed assets or unable to pay debts as they fall due).
• The debt owed to the petitioning creditor(s) is at least THB 1 million for an individual or THB 2 million for a juristic person (company/business entity).
• The debt is for a definite amount. 

 

The Bankruptcy Process

1. Petition Filing and Court Hearing: A creditor files a petition with the Bankruptcy Court. The court sets a hearing to determine the debtor's insolvency and whether to accept the petition.
2. Absolute Receivership Order (ARO): If the court is satisfied that the debtor is insolvent, it issues an ARO. This order transfers control of all the debtor's assets and business affairs to an Official Receiver (a government official from the Legal Execution Department).
3. Creditors' Claims: The ARO is published in the Government Gazette and a local newspaper, at which point creditors must submit their claims to the Official Receiver within a specified timeframe (typically two months for local creditors, four for foreign creditors).
4. Asset Liquidation and Distribution: The Official Receiver collects and liquidates the debtor's assets, distributing the proceeds to creditors based on a statutory order of priority (secured creditors generally have priority over unsecured creditors, after certain labor obligations).
5. Discharge: The process concludes with the debtor's discharge from bankruptcy. 

 

Types of Proceedings

• Personal Bankruptcy: Focuses on liquidating an individual's assets. An individual is typically discharged automatically after three years from the court's judgment, unless there are findings of dishonesty.

 

Consequences of Bankruptcy

• The debtor loses control over their assets and business operations.
• The debtor's credit rating is severely impacted for a period (e.g., five years).
• Bankrupt individuals may face restrictions on holding certain professional positions, such as company directorships.
• Certain debts, such as tax liabilities or those arising from fraud, are not discharged by bankruptcy.