Advice Needed On Credit/Loan Agreement

[chronos]

Hi Guys...I am in urgent need of some financial advice, preferably by someone in the Banking or legal world or who has a personal experience and was or is still based in Thailand.

Let me explain:

My wife's Father died some months ago, he did leave some debts, most of which have been paid off or resolved. He was a local Head Teacher.

2 months after his death the family received correspondence from a loan/credit company stating that they could not draw payments from his account. She informed them that he had died. they informed her that because there was no 'loan protection insurance' in place that she was now responsible for the debt and would have to carry on paying the outstanding debt circa 60K baht. or that they would pursue her and the family. She has continued to pay the monthly amount. It is only now that my wife has informed me about the debt.

It would appear that her Father had entered into some sort of credit/loan agreement with a company

I have little or no understanding of Thailand's financial regulations relating to credit cards or loans and my question is..is the debt 'legally' transferable to the surviving spouse?

In the UK..unless there is a guarantor or 3rd party involved in the original agreement. thereby making it 'joint and several'..the debt dies when the proposing borrower dies and is either written off or subject to insurance payment to the creditor.

I am of the opinion, rightly or wrongly, that there is no responsibility for the outstanding indebtedness of this loan for my wife or any other family member and I am assured that her nor any other family member has signed any paperwork relating to the original loan agreement that her Father took out. Quite clearly, what I consider to be a disingenuous approach by this Company has frightened my wife during a stressful time into continuing the payments. I have instructed my wife to stop all payments and to ask the Company to provide legal proof that she or any family member is responsible for the debt..am I correct in doing this?

Further, if it is shown that this Company has obtained monies by deception or threatening behavior and making her believe that the debt is now hers...can the money she has already paid be recovered?

I am at a loss as to the financial procedures/rules relating to matters of this nature in Thailand and would rely solely on your bank of knowledge in providing some advice .

I do know that my wife and her Mother are extremely worried and fear 'heavy type debt collectors' knocking on the door of their house.

I really do need to get this resolved...as we have recently submitted an application for a Settlement Visa for the UK for a Spouse..it is unlikely that there could be any connection relating to the alleged debt..nevertheless...I would not wish for any complications that could jeopardize the process.

Any knowledgeable advice would be greatly appreciated..

Thanks Mike

Edited July 9, 2011 by katabeachbum
company info removed to avoud being in breach of Thai law naming&shaming, and thus in breach of Forum rules

[CWMcMurray]

If married, then I do not think there is any doubt that the widow (wife's mother) would be responsible as all property and debt are jointly owned in a marriage..

If her father was not married to her mother (or anyone else), then the debt should be paid by the deceased father's estate prior to any assets being released to any of the beneficiaries of the will.

If for example your wife inherited anything of value from her father's estate, it could easily be argued that either your wife would be on the hook for the debt or the assets she received from her fathers estate would need to be sold to pay the debt.

[aurelius]

The estate is responsible for any outstanding debts.  This should be considered by the court prior to the distribution of any proceeds to the surviving children and surviving spouse.   If there are no assets to distribute then there is no claim that can be made upon the relatives as long as they are no co-borrowers/guarantors. However if the family has taken possession of the father's assets without passing through a formal court process it's possible that there is some grounds for a claim (the company is legitimately losing something to which it is entitled to repayment of).

The following translation appears relevant:

Section 1736. So long as all the known creditors of the estate or legatees have not been satisfied by the performance or distribution, the succession is deemed to be under management.During such period the administrator is entitled as such to do the necessary acts of management such as to enter actions or to submit answers in Court and so on. He shall take all necessary steps to collect the debts due to estate within the shortest possible time. After the creditors of the estate have been satisfied he shall divide the estate.

More at:http://www.thailandlawonline.com/Laws/inheritance-laws-execution-of-the-will.html

Anything else is moral/social pressure (keeping the good family name by avoiding non performing loan claims).

Credit bureau information is confidential unless authorised by written signature of the owner of the information; this is not likely to affect any visa process.  

Also, there are laws in place controlling the heavy handed actions of debt collectors - if it is with a recognised financial institution (as opposed to the grey lending market), there shouldn't be any problems with heavies knocking at the door.  

Good luck

Edited July 9, 2011 by aurelius

[InterestedObserver]

1. If the credit/loan agreement was for the management of household affairs or for a business carried on by the spouses in common, then it is a joint debt of the legally married husband and wife. The estate now becomes responsible for the debt.

2. The creditor(s) are entitled to be paid out of estate assets only.

3. Unless the family cosigned the agreement they are not responsible.

4. The OP's wife certainly is not responsible for the debt.

Edited July 10, 2011 by InterestedObserver

[Soutpeel]

1. If the credit/loan agreement was for the management of household affairs or for a business carried on by the spouses in common, then it is a joint debt of the legally married husband and wife. The estate now becomes responsible for the debt.

2. The creditor(s) are entitled to be paid out of estate assets only.

3. Unless the family cosigned the agreement they are not responsible.

4. The OP's wife certainly is not responsible for the debt.

Yeap...all claims against the estate of the deaceased unless as mentioned there is a co-signature on the loan

[CWMcMurray]

What if the husband (deceased) signed for this loan while married to his wife...

In a marriage both parties are responsible for the debts, correct? So why would the death of the husband absolve the wife of the debt?

Does a husband or wife really need to co-sign for a loan to be considered part of "joint finances" under marriage laws?

[Soutpeel]

Does a husband or wife really need to co-sign for a loan to be considered part of "joint finances" under marriage laws?

In my understanding the answer is yes, they do both need to sign on the dotted line.

[aurelius]

I understand that the spouse signs something to acknowledge the existence of the loan, but that doesn't necessarily make them a co-borrower. Someone single has to sign something certifying that the are single and that there is no-one else to be "advised" about the loan. Maybe someone who has done this can comment...