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[Starre]

A friend of mine has found herself in the credit card trap where she can now only afford the minimum repayments and subsequently will not be out of debt for a very long time.

Are there financiers in Thailand available to restructure/renegotiate individual debts thus leaving the individual with a fixed monthly payment for a fixed term - similar to such companies in Australia/UK/USA.

She has attempted to obtain a consolidation loan from her bank and a couple of others but they are not very cooperative and seem to want to keep her in the debt cycle and milk as much as possible until she eventually defaults. The total debt amount we are talking about is about 150,000 baht over about 6 providers.

Thanks in advance for any information provided.

[chiang mai]

The short answer is no, it's more likely that the banks consider her a poor risk, no offense intended. Her options are a secured loan against assets or loan sharks, the latter to be avoided at all costs.

[Starre]

The short answer is no, it's more likely that the banks consider her a poor risk, no offense intended. Her options are a secured loan against assets or loan sharks, the latter to be avoided at all costs.

Thanks - no offence taken. The thing is she will be a poor risk if none of the banks step forward and provide a consolidation loan - ultimately they will all lose if she defaults. The debt is only just manageable at it current level verses her income so now is the time to negotiate. They were all pretty quick to throw credit cards at her (and obviously she was quick to accept them) but when it comes to disarming the debt trap, they are none too helpful.

@ Chiang mai, do you know what happens if she finishes up defaulting? Is there an agency like Veda that maintains personal credit files in Thailand? Here in Oz, defaults last 5 years on file unless paid or negotiated. Or is there no such thing as defaulting in Thailand and the creditors immediately move to seek bankruptcy?

[chiang mai]

The short answer is no, it's more likely that the banks consider her a poor risk, no offense intended. Her options are a secured loan against assets or loan sharks, the latter to be avoided at all costs.

Thanks - no offence taken. The thing is she will be a poor risk if none of the banks step forward and provide a consolidation loan - ultimately they will all lose if she defaults. The debt is only just manageable at it current level verses her income so now is the time to negotiate. They were all pretty quick to throw credit cards at her (and obviously she was quick to accept them) but when it comes to disarming the debt trap, they are none too helpful.

@ Chiang mai, do you know what happens if she finishes up defaulting? Is there an agency like Veda that maintains personal credit files in Thailand? Here in Oz, defaults last 5 years on file unless paid or negotiated. Or is there no such thing as defaulting in Thailand and the creditors immediately move to seek bankruptcy?

I'm sorry, I have no idea about the credit process here, from the bits and pieces I recall it is no where near as structured as in the West and bankruptcy doesn't seem to feature hardly at all. Hopefully others can add better value and fill in the gaps.

[Soutpeel]

The short answer is no, it's more likely that the banks consider her a poor risk, no offense intended. Her options are a secured loan against assets or loan sharks, the latter to be avoided at all costs.

Thanks - no offence taken. The thing is she will be a poor risk if none of the banks step forward and provide a consolidation loan - ultimately they will all lose if she defaults. The debt is only just manageable at it current level verses her income so now is the time to negotiate. They were all pretty quick to throw credit cards at her (and obviously she was quick to accept them) but when it comes to disarming the debt trap, they are none too helpful.

@ Chiang mai, do you know what happens if she finishes up defaulting? Is there an agency like Veda that maintains personal credit files in Thailand? Here in Oz, defaults last 5 years on file unless paid or negotiated. Or is there no such thing as defaulting in Thailand and the creditors immediately move to seek bankruptcy?

150 k ?......pay it for her, your a rich farang

[AnotherOneAmerican]

The short answer is no, it's more likely that the banks consider her a poor risk, no offense intended. Her options are a secured loan against assets or loan sharks, the latter to be avoided at all costs.

Thanks - no offence taken. The thing is she will be a poor risk if none of the banks step forward and provide a consolidation loan - ultimately they will all lose if she defaults. The debt is only just manageable at it current level verses her income so now is the time to negotiate. They were all pretty quick to throw credit cards at her (and obviously she was quick to accept them) but when it comes to disarming the debt trap, they are none too helpful.

@ Chiang mai, do you know what happens if she finishes up defaulting? Is there an agency like Veda that maintains personal credit files in Thailand? Here in Oz, defaults last 5 years on file unless paid or negotiated. Or is there no such thing as defaulting in Thailand and the creditors immediately move to seek bankruptcy?

Consolidation loans often change an unsecured debt into a secured debt (almost always a bad idea).

As unsecured debt, you don't have to pay it back with the only penalty being put on a credit blacklist.

But when consolidated and changed to a secured debt, you face civil proceedings and the loss of your home in the event of non-payment.

Rules vary depending on the country and state you obtained the loan.

In Thailand, if you don't pay, no more credit for 5 years then the debt is forgotten.

Bankruptcy in most countries is a way to attempt to avoid the penalties for non-repayment of secured debt.

Most Thais just stop repaying, no negotiation, no agreement, just stop paying. Move house if they chase you.

Not seen any that appear to have suffered as a result.

Loan sharks, no way, they hurt you when you don't pay.

Chiang Mai's options would be extremely foolish to follow.

Edited June 28, 2014 by AnotherOneAmerican

[chiang mai]

The short answer is no, it's more likely that the banks consider her a poor risk, no offense intended. Her options are a secured loan against assets or loan sharks, the latter to be avoided at all costs.

Thanks - no offence taken. The thing is she will be a poor risk if none of the banks step forward and provide a consolidation loan - ultimately they will all lose if she defaults. The debt is only just manageable at it current level verses her income so now is the time to negotiate. They were all pretty quick to throw credit cards at her (and obviously she was quick to accept them) but when it comes to disarming the debt trap, they are none too helpful.

@ Chiang mai, do you know what happens if she finishes up defaulting? Is there an agency like Veda that maintains personal credit files in Thailand? Here in Oz, defaults last 5 years on file unless paid or negotiated. Or is there no such thing as defaulting in Thailand and the creditors immediately move to seek bankruptcy?

Consolidation loans often change an unsecured debt into a secured debt (almost always a bad idea).

As unsecured debt, you don't have to pay it back with the only penalty being put on a credit blacklist.

But when consolidated and changed to a secured debt, you face civil proceedings and the loss of your home in the event of non-payment.

Rules vary depending on the country and state you obtained the loan.

In Thailand, if you don't pay, no more credit for 5 years then the debt is forgotten.

Bankruptcy in most countries is a way to attempt to avoid the penalties for non-repayment of secured debt.

Most Thais just stop repaying, no negotiation, no agreement, just stop paying. Move house if they chase you.

Not seen any that appear to have suffered as a result.

Loan sharks, no way, they hurt you when you don't pay.

Chiang Mai's options would be extremely foolish to follow.

And what options did chiang mai provide exactly, you doing the hard stuff again Tommo/52.

Edited June 28, 2014 by chiang mai

[Starre]

@AoneA - many thanks for that. I figured a lot of Thais would find themselves in this situation (at least a lot of the one's I know) and it would cost the banks more in chasing defaulters and litigation than most of the actual debts incurred. It's good to know the worst damage that can be done to her is a 5 year blacklist and credit hiatus - she gets a decent pay bump next month so she's going to do the rounds again with getting a consolidation loan - but your advice re putting up any assets is well noted and will be heeded as is @chiang mai's advice re the sharks - we'd be looking for a refugee visa to Oz if she went down that track

[AnotherOneAmerican]

You could just pay off the loan for her!

How bad could a Thai CC debt be?

Edited June 28, 2014 by AnotherOneAmerican

[Starre]

You could just pay off the loan for her!

How bad could a Thai CC debt be?

She's got half a dozen of them all maxxed out to over 150K total and we won't go into my financial status - a previous post of mine on another topic may give you a hint

[ezzra]

The question that should be asked is what is the worst that can happened to her if she default

on all payments?

from experience, if she's going to be sued in civil court than she shouldn't worry at all, the judge

will be very, very, merciful and forgiving like all Thai judges are and allow her to pay as much

as she's comfortable with, and that after 2 years waiting to see a judge,

In a criminal court, and I doubt very much it will get there, same thing pretty much, the judge

will see that the defended has nothing to offer and will instruct to mediate between the 2 parties,

and that also, will take long time to get there, that will give your friend the time to regain her

financial footings and perhaps persuade the bank to accept her partial payment until she cleared

them all,

[meatboy]

if she is only paying the min.payments that means only the interest and not the loans.so the debt will not go away unless she ups the payments which she cant.so the only road she can go down is,has she any assets that she can raise money on,if not then its never goner go away.if its only banks and not any shadey co's.then default is the only way.here in Thailand I don't see the banks selling the debt on so she's not goner have the motor bike duo in black helmets knocking on her door.it does mean black listed,no credit of any kind and she has to tighten her belt,oh and loose face,no mention of husband or bf.or gf.

[Starre]

if she is only paying the min.payments that means only the interest and not the loans.so the debt will not go away unless she ups the payments which she cant.so the only road she can go down is,has she any assets that she can raise money on,if not then its never goner go away.if its only banks and not any shadey co's.then default is the only way.here in Thailand I don't see the banks selling the debt on so she's not goner have the motor bike duo in black helmets knocking on her door.it does mean black listed,no credit of any kind and she has to tighten her belt,oh and loose face,no mention of husband or bf.or gf.

@meatboy, yes the principal debt is only reducing very minimally each month and unless she won the lottery, it will be around for many many years - hence trying to negotiate with the banks or restructuring the number of debts into one at reduced interest. At the moment she is handing over about 70% of her pay cheque to the creditors and living on about 30%. Assets are owned by the family and she pays rent to her Aunt but obviously only very little. She has been down the track of borrowing money from friends, family etc without success. She is currently not married or in a relationship - I am her ex BF and subsequently I'd rather help her to help herself as I have my own problems after suffering a serious illness last year.

It sounds from the above her best way of forcing a negotiation is to default - at least then she could keep the majority of her monthly salary for a while and she is still young enough to put this behind her after serving the mandatory blacklist period. Mind you she doesn't handle stress too well so hopefully it won't reach a civil court let alone the criminal court as @ezzra has suggested.

[meatboy]

if she is only paying the min.payments that means only the interest and not the loans.so the debt will not go away unless she ups the payments which she cant.so the only road she can go down is,has she any assets that she can raise money on,if not then its never goner go away.if its only banks and not any shadey co's.then default is the only way.here in Thailand I don't see the banks selling the debt on so she's not goner have the motor bike duo in black helmets knocking on her door.it does mean black listed,no credit of any kind and she has to tighten her belt,oh and loose face,no mention of husband or bf.or gf.

@meatboy, yes the principal debt is only reducing very minimally each month and unless she won the lottery, it will be around for many many years - hence trying to negotiate with the banks or restructuring the number of debts into one at reduced interest. At the moment she is handing over about 70% of her pay cheque to the creditors and living on about 30%. Assets are owned by the family and she pays rent to her Aunt but obviously only very little. She has been down the track of borrowing money from friends, family etc without success. She is currently not married or in a relationship - I am her ex BF and subsequently I'd rather help her to help herself as I have my own problems after suffering a serious illness last year.

It sounds from the above her best way of forcing a negotiation is to default - at least then she could keep the majority of her monthly salary for a while and she is still young enough to put this behind her after serving the mandatory blacklist period. Mind you she doesn't handle stress too well so hopefully it won't reach a civil court let alone the criminal court as @ezzra has suggested.

thanks for replying to my post,i can understand your concern but as you say she has to get out of this on her own.if she defaults I cannot see the banks pursueing her for such a trivial amount there fore she shouldn't get any stress from them.she will have time to reflect how stupid she's been but the question is will she learn her lesson.having been an accountant back in the uk.I saw a lot of this,but here in Thailand most if not all is down to face.if next door has a new car she has to get one as well, it doesn't seem to register with them that using cards is like a money tree and autumn never comes. .i do know of people in debt but they seem to be oblivious to the fact just to save face.

as she was your ex.lets hope she doesn't go down that road that leeds to selling herself,like so many have to.

[Suradit69]

I think you seem to think a debt consolidation process will turn a nightmare into happy times. You may hear of debt consolidation offers in the US, but a fair number of them are scams. You're just adding one more party that wants to profit from the situation. Thankfully I have never needed to consider something like that, but even if in a bind, whether in the US or Thailand, I would still not go that route.

What is Debt Consolidation? The answer to this question, depends on who you ask. While Debt Consolidation, may seem like a "quick fix" for all of your debt problems, the term can be misleading. Debt Consolidation is making national news everyday, as millions of americans have fallen victim to the alluring promises of 'easy fixes' that have left them deeper in debt and more desperate then ever.

Some Debt Consolidation companies employ deceptive scams, such as setting up a hollow payment plan and luring their clients into making the first payment on the "plan" immediately. They usually take their fee off the top and THEN negotiate with creditors (sometimes months later) to try to work out a plan while your payments are building in an "escrow account". Problem is, creditors may not be "on board" with their plan and frequently opt-out of the negotiations. It only takes ONE uncooperative creditor to ruin a debt consolidation plan. This creditor can and will sue you in lieu of the debt consolidation "plan" and there there is little you can do to defend. If you have been sold on a plan from a TV commercial, radio ad, or Net solicitation preaching financial freedom, but now you feel like a "leaf in the wind"- you know what it is like to be a victim of a Debt Consolidation scam.

http://mrdebtbuster.com/debt-consolidation-scam-center.html

[Robert24]

hmmm...probably 2 options. 1) default or 2) she should ask a family member/parents to pay back the 150k.

I wouldn't go through the debt consolidation process as it will take forever for her to pay back the credit.

Option 1) is probably not that bad as Ezzra outlined. I have a Thai friend who defaulted on a bank credit and he had to go to court. Only downside is that he cannot get any form of new credit now, everything has to go through his wife's name. Apart from that he is doing fine.

[Starre]

@Robert, thanks for your reply. Do you know if your friend who defaulted on bank credit was blacklisted permanently from obtaining credit again or whether his record was clear after 5 years as suggested in previous posts? At some stage in the future she may wish to get a loan for property and during the 5 year credit hiatus she could put together a deposit but if the blacklisting is permanent, we'll have to look at other ways to pay down her debt

[Robert24]

He mentioned that he is now blacklisted permanently from getting credit. His wife seems not to be impacted so he can do any loan trx in his wife's name. I'm no expert in this area, so probably best to seek advise from a lawyer or some other expert who can walk you through the downsides of defaulting on the credit card loans.

[SheungWan]

@Robert, thanks for your reply. Do you know if your friend who defaulted on bank credit was blacklisted permanently from obtaining credit again or whether his record was clear after 5 years as suggested in previous posts? At some stage in the future she may wish to get a loan for property and during the 5 year credit hiatus she could put together a deposit but if the blacklisting is permanent, we'll have to look at other ways to pay down her debt

Has she made any payments over the last 3 months?

[Starre]

@Robert, thanks for your reply. Do you know if your friend who defaulted on bank credit was blacklisted permanently from obtaining credit again or whether his record was clear after 5 years as suggested in previous posts? At some stage in the future she may wish to get a loan for property and during the 5 year credit hiatus she could put together a deposit but if the blacklisting is permanent, we'll have to look at other ways to pay down her debt

Has she made any payments over the last 3 months?

@Sheungwan, yes she pays regularly. She is in a bit of trouble this month hence my plea to the forum - I can see the situation getting gradually worse - but as of last month her payments were up to date.

[NanLaew]

Only 150k? I made that last week.

Is she young? Nice looking?

Maybe we can talk.

[chiang mai]

Is anyone else underwhelmed!

[Saradoc1972]

Take a structured approach both as to financial status and legal situation.

I've done several (very minor and more or less private) bancruptcy cases for German clients, I obviously cannot talk about Thai law.

5-6 institutional creditors would (in a German case) sound to me like a cake-walk, but again I cannot speak about local business customs.

Anyway, some basic principles apply. The first thing you will need to do is put all the papers into one neat, orderly file and put all the data about creditors (adresses, attys/debt collectors and their addresses, account and customer numbers, primary debt, fees, accrued interest and the like, has a lawsuit been filed to court?) into one neat spread sheet. This gives you the status of the debtor, how much she can pay, how much interest (doubtlessly in the 10+% figures) she would have to pay and how much of payments would be going to the primary debt (probably after settling all sorts of ludicrous fees first).

Without that status and an orderly file on things you don't know what you're even talking about and can't start negotiations or decide whether you want those.

Next step is to assess the legal situation. Maybe put a question through to ThaiVisa's "Ask the lawyer". Is there a bancruptcy law for private persons? How long will it take to go through that procedure? Is there a statutory limitation on how long private claims can be pursued? Have they filed lawsuits or didn't bother?

Now decide on your bargaining position and negotiate accordingly.

Example:

Client is a recently divorced 39-y-o Kindergarten-teacher with a 12-y-o daughter. Just got her state disability pension for morbus crohn and related (burn-out-like) psychic disorders in the amount of some 1.2 k€, additional income from some 200 € private disability insurance and 154 € child-benefits, child's father's income has been seized by judicial attachment for some 300 € in alimonies. Net income is around 1,850 €.

She got joint and several debts in the amount of some 180k€ with her ex-husband for the late family home she got evicted from with two banks, 120k and 60k respectively, with some odd fees and interest around 10% for default she cannot even hope to pay. (STATUS)

Law says: her income can be seized in the amount of 180 €/month, period. If she files for bancruptcy she will just pay that and be rid of everything after 6 years (changed this very 1st of July, but never mind).

Solution: write both banks a nice letter with an offer they can't refuse and her full status, ask nicely if they will let her off the hook if she just pays them those 180 € for 6 years (120 to the first, 60 to the other bank) or threaten full bancruptcy procedures where half of that money will go to the courts and some appointed insolvency lawyer.

They will opt to oblige (and did so, ETA: 11/2015).

Edited July 1, 2014 by Saradoc1972