Civil Groups Push Bankruptcy Reform for Small Debtors in Thailand

A coalition comprising civil society groups, lawmakers, and debt reform advocates is pressuring Thailand’s new government to prioritize the revival of the amended Bankruptcy Act. This initiative, introduced at a forum by Fair Finance Thailand, aims to offer voluntary rehabilitation for small debtors without additional budget spending. Supporters assert that the act, already unanimously passed by the House of Representatives before lapsing, is crucial for providing a practical solution for those trapped in debt.

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The urgency behind this call is tied to Thailand's constitutional provision under Section 147. It allows a new cabinet to request the continuance of a lapsed bill within 60 days of the first parliamentary session. Advocates warn that failing to act promptly would prolong the financial struggles of millions, increasing their interest burdens. They argue that the reform isn't just a technical change; it's seen as a vital escape route for ordinary debtors burdened by insolvency, offering a sustainable debt-resolution mechanism.

The amended law proposes significant changes, such as faster legal protection and automatic stays to shield debtors once a rehabilitation petition is accepted. This would halt creditors from pursuing lawsuits or seizing assets, enabling debtors to reorganize effectively. Another key feature is the cramdown mechanism, allowing a court-approved plan to proceed despite creditor disagreements, alongside lowered thresholds for rehabilitation access and job protection for civil servants under debt restructuring.

Opponents, particularly from the banking sector, voice concerns about the reform's potential impact on guarantors' liabilities, mortgage debt handling, and moral hazard risks. They emphasize the need to maintain balance between borrower relief and credit discipline. The broader goal of the bill is to shift the focus of Thailand’s debt solutions from short-term relief to structural reform. Proponents see it as a test of the government's commitment to genuine debt reform beyond mere stimulus measures.

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  Adapted by ASEAN Now · The Nation · 17 Apr 2026

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