Seeking Advice About Checks ( Money)

[BEDBANDIT]

hi .

A falang friend of mine is owed a large sum of money ( £5000) . he lent it to Nong his neighbor @ 20% per month , she made serverl payment , then anything went wrong . no payment were made etc.etc .

she had signed a document , the same type you sign when hiring a bike .

yesterday my friend called the police, they came, did alot of shouting at Nong and told her to sign 22 predated checks for the money still owed , my freind was told buy the police that if she dose not honour the checks , that is a criminal offence in thailand and she will go to jail.

Can anyone tell me if this is true , are the checks good ,

I ask this because she is/was very good friends with the police (small island)

thanx for any help / comments

( ill post the full story if you want , but these are the just the facts)

[Shrubbery]

20% per month interest. IMO your friend is the one who is the criminal.

[Gumballl]

Who knows what is legal in Thailand from one day to the next.

In the US it would not be legal. Forging checks or intentionally cashing checks with insufficient funds in the bank is a crime. But as long as the check does not have a signature, it is just a mere piece of paper of no value.

The contract that your friend has however could be valid. Whether it is legal to charge 20% is up to the courts to decide. Is your friend paying taxes on the "income" derived from loaning their money? If not, then they are possibly breaking the law (in the US, that is a certainty).

Btw, is it possible for a person in LOS to declare bankruptcy?

[jumnien]

Yes, I'm sure the 20% interest is against the law, I believe it is called usury.

[tracer5050]

What is illegal in the US would be very hard to inforce in Thailand . Different legal system. 20% interest Wow he must be a credit card company

[sbk]

There is a limit on the interest allowed on loans, not sure what it is but most certainly far less than 20%.

Where I come from, your friend would be called a loan shark.

[simon43]

Can anyone tell me if this is true , are the checks good ?

[\quote]

The checks are only good if she has the money in her bank account to honour them! And clearly, that is not the case right now.

My understanding is that she could go to prison if these checks bounce...

20% interest rate per month? 240% per year? That is illegal and if Nong has a document with your friend's signature on it and confirming this interest rate, then your friend may have some problems as well.... and not just legal problems. He could 'disappear' for much less than one month of interest charges....

Simon

[tracer5050]

I have never been there but from what i hear , he dont want to be in a thai jail

[Heng]

If the falang was stupid enough to put 20% down on the loan contract (and yes 240% a year is illegal... more on this below*), it'll be one of those "you drop your charges and I'll drop my charges" 'yom kwam' situations ...in other words, falang loses out as usual, as the other party is more than happy to have that happen as Nong has said falang's loan funds.

Otherwise, then yes, bounced checks are most certainly a felony. 'No, not 20%, it's a simple loan and these are the checks Nong presented.' Nong will likely have to come up with funds to avoid having this get to court.

*And for all of you budding financiers out there, you should only loan out at the legal 1.5% (18% p.a.) with secured collateral (property) registered with the land department. Even better if someone in your family has a pawn shop or finance company (there are like X,000 licenses out there so there's a good chance that there are only a few degrees of separation between you and a legal operation). 1.5 pts. doesn't mean you only make a return of 18% a year... which isn't bad by any means, as even if a loan is paid back within 1 day or 30 days, the interest is still 1.5%. There's no such thing as a 1 day million Baht loan for 500 Baht interest. It's the monthly 15,000 Baht rate. Kind of like automobile loans (no matter how fast you pay it off, your interest is already precalculated and fixed).

In theory you can make up to 500+% per year if everyone pays up within a day, that doesn't happen, but you can screen out loan clients to a certain extent (loaning to folks who actually run businesses.... not gamblers or folks who have no income steady stream) who will likely pay you back in 3, 5, 10 days and only need your funds as true bridge financing. A well managed loan operation should have a margin of middle double digit pts. a year. It's never anything like triple digits as with all things, there are always going to be a few defaults no matter how good your screening. Although, for the long term, with seized properties, I wouldn't be surprised if it did average out to triple digits per year.

Certainly gives you a nice cushion and allows you to say "oh well, big deal" for when your stocks or forex income streams take temporary dives.

[blizzard]

only lend money to people who dont need it!

thats the only way you make money being a bank.

my god some of you have no business cents..............lol.

tell your friend to write it off on his taxes. he should have no problemo as he has signed documntation of the loans.........lol.

the guy who said a silly farang is born every minnute was spot on.

Edited August 30, 2007 by blizzard