Indebtedness in Thailand - loan sharks/money lenders

[gerryBScot]

An acquaintance has come seriously unstuck with debt owing a range of loan sharks and informal money lenders a pile of money. The person has income but it is dwarfed by the level of indebtedness which is roughly equivalent to their annual salary.

Presumably these debts are unenforceable beyond illegal means such as threats of and the use of actual violence. Presumably the lenders are operating illegally in that these are commercial loans in that they are charging a monthly vig ( a ridiculous amount) on unpaid balances etc. The acquaintance not surprisingly has become seriously ill.

If repayment is not an option, what can they do?

[lovelomsak]

If repayment is not an option, what can they do?

Since when has repayment not an option when borrowing money? I read somewhere a while ago the government has a service where they pay off the loans to sharks and set a reasonable monthly payment for the person to pay at low interest till the debt is paid. I think it is on a thread even here in Thai Visa do a little searching. But I would like to add never should a borrower feel repayment isnot an option.Repayment is the responsibility of borrowing.

[shirtless]

They need to stop being the ultimate consumers , if you cannot afford it today you certainly cant pay for it tomorrow.

[Pib]

I wouldn't call total debt equaling his total annual salary as an impossible debt to pay off. Anyone who has a home mortgage is in the same situation although probably owing the money to a bank vs a loan shark. If he takes the loan sharks/informal lenders to court, which basically means taking on those folks, he'll most likely still end up a big debit to pay although the court may lower the interest owed to a 15% annual rate. I expect now your friend is probably paying a 15 to 30% "monthly" rate.

[Jessi]

There are a lot of Thai's getting into this situation and growing every day.

Where Mrs Jessi is working three other women are in debt to these loan sharks. Every day they come around & collect money.

Every day they ask Mrs Jessi if she needs money, she always replies NO.

One woman spoke with the Mrs and told her she had to find 40,000B a month to pay these people from loans she had.

She just stopped turning up for work and everyone thought she went to Phuket but in fact she is out selling her body

while her lazy lay about husband drinks & plays cards.

The going interest rate is 20% per month and mainly run by Indians.

They can not enforce the loans to be paid legally but they will find other ways to extract the money owing to them.

Sorry Jerry but I don't have a solution to your friends problem other than to do a runner and hope they cant find him/her.

[Searat7]

I have Thai friend with legal (mostly credit card) debt 12 times his salary. Hard to give advice in a situation like that

[CharlieH]

From what I have heard and seen, it seems these high interest non secured loans, they collect every month but its just the interest, there is actually nothing coming off the principal sum so it never cleared. Once they get you, they got you for good unless you find "some way" to clear the principal.

[godden]

Never shall a lender or borrower shall i be.

[Mudcrab]

If repayment is not an option, what can they do?

Cancel the debt with extreme prejudice.

[samsensam]

easy, do what many thai's do; 'borrow' money from friends and family then refuse to pay it back. problem solved, actually problem passed onto friends and family but when was that ever an issue for a thai?!

or, plan b. find a foreign sucker

[oxo1947]

.......what can they do?-----OP

See if she can find a farang.............................

Edited November 7, 2015 by oxo1947

[Robert24]

Either go bankrupt or default on some loans or sell assets to pay back the loans.

like everywhere in the world, if you borrow too much, be it as a company or individual and you cannot manage to keep up with the payments etc, you default on your loans. Usually the lender has security against your loans, so you will loose that.

[kinmaew]

Ahhh Thais and their debts, I love it and the most I love is my contribution is $0 and always will be

[dotpoom]

If repayment is not an option, what can they do?

Since when has repayment not an option when borrowing money? I read somewhere a while ago the government has a service where they pay off the loans to sharks and set a reasonable monthly payment for the person to pay at low interest till the debt is paid. I think it is on a thread even here in Thai Visa do a little searching. But I would like to add never should a borrower feel repayment isnot an option.Repayment is the responsibility of borrowing.

Exactly correct for individuals....it's a pity some countries cannot see it the same way, like Greece for example....then again, shouldn't the lender be equally classed as "irresponsible" when lending money to people they know cannot possibly pay it back.

[bazza40]

If the person affected can get a bank loan which will repay the principal and interest in one hit, it may offer a way out. Although having said that, he/she probably got in with the loan sharks because the banks wouldn't touch it.

Moral: If the banks won't loan you money, you shouldn't be borrowing.

[farangmick]

Woman next door to my in-laws ran up 700,000 baht gambling debts. Simple farming folk. The whole family probably only clears 15,000 a month. The enforcers turned up and she did a runner with the children. her husband stayed to work the farm. Couple of months later, most of the farm sold at fire sale price to clear the debt, and she returned acting like nothing had happened. Tough for the kids, and her husband, who is a grafter who doesn't drink, smoke, gamble or do drugs.

[kannot]

Tell them "responsibility for their own actions" is something many Thais need to learn, tomorrow does come, and quickly, life is not just for today.

[kannot]

Woman next door to my in-laws ran up 700,000 baht gambling debts. Simple farming folk. The whole family probably only clears 15,000 a month. The enforcers turned up and she did a runner with the children. her husband stayed to work the farm. Couple of months later, most of the farm sold at fire sale price to clear the debt, and she returned acting like nothing had happened. Tough for the kids, and her husband, who is a grafter who doesn't drink, smoke, gamble or do drugs.

......................but is an idiot for staying with her

[kannot]

I have Thai friend with legal (mostly credit card) debt 12 times his salary. Hard to give advice in a situation like that

Try the words " you are incredibly stupid to borrow that amount of money"...........That should do it.

[farangmick]

Woman next door to my in-laws ran up 700,000 baht gambling debts. Simple farming folk. The whole family probably only clears 15,000 a month. The enforcers turned up and she did a runner with the children. her husband stayed to work the farm. Couple of months later, most of the farm sold at fire sale price to clear the debt, and she returned acting like nothing had happened. Tough for the kids, and her husband, who is a grafter who doesn't drink, smoke, gamble or do drugs.

......................but is an idiot for staying with her

I wouldn't for sure. But shows that not all Thai men are feckless children in an adult body.

[connda]

If repayment is not an option, what can they do?

My wife has a friend in the exact position. The answer: "Run!" Her friend moved to a different part of Thailand about 600 km from Chiang Mai.

[puukao]

Billy sees nice car on facebook, instagram, whatever.....Billy goes to college. Billy now has 200,000 in college debt. Billy gets mad. Billy tries to make the short buck, since can't do anything in life making $15 USD an hour. Soon Billy gambles......now it's over...

Billy buys house at wrong time when lenders allowed anyone to buy a house........foreclosed......it's over

Billy gets married, 5 kids, big house, but average job......it's over

Billy dreams of having things....plays lottery every day, all day.......now 10-years no real job.....it's over

Billy tries to buy everything his facebook friends have, since they seem happy.......it's over

LOL.......the older i get, the simpler i make it......so i don't end up like billy.....

[chondan]

love lomsak, that is Petchabun. Funerals , etc take a lot out of families. Loan sharks abound. It is not Thai people anymore, It is US and Britain, the wives of expats that are zapping the rural Thais And some of them are coming back from US and UK and shitting on everyone in the village.

[2fishin2]

love lomsak, that is Petchabun. Funerals , etc take a lot out of families. Loan sharks abound. It is not Thai people anymore, It is US and Britain, the wives of expats that are zapping the rural Thais And some of them are coming back from US and UK and shitting on everyone in the village.

Hahahaahah hahahahaahh so are you saying its only the thai women married to white guys who are ruining everybody by doing illegal loansharking? I can see it now, old fat, Bald guys hobbling down the road with their canes, bottle of beer one hand smoke in other trying to intimidate people into paying their wive's money back. Hahahahahaahahah hahahahahaahah

[hhgz]

"An acquaintance has come seriously unstuck with debt ..."

It's not your concern. If you give her money, she'll be back for more. Welcome to Thailand!

[jacko45k]

Some shark loans are a whopping 10% per month interest and the premium is untouched. Two or three of those and you can be on the road to ruin.

If the person has no assets to sell consolidation is the only solution, if you can find anyone who will do it.

The idea being a single cheaper loan is used to pay off the others completely, then no more borrowing.

Trying not to pay is dangerous, although a complaint to police can be made where intimidation is concerned they are rarely effective and can just aggravate the issue.

[StevieDee]

"An acquaintance has come seriously unstuck with debt ..."

It's not your concern. If you give her money, she'll be back for more. Welcome to Thailand!

Exactly! Maybe the OP tells them that he has become "seriously unstuck with debt" and see what their response would be.

[Jonathon]

Most Thais, particularly from rural areas, are the eternal optimists. They never consider their ability to repay.

[Robert24]

Some shark loans are a whopping 10% per month interest and the premium is untouched. Two or three of those and you can be on the road to ruin.

If the person has no assets to sell consolidation is the only solution, if you can find anyone who will do it.

The idea being a single cheaper loan is used to pay off the others completely, then no more borrowing.

Trying not to pay is dangerous, although a complaint to police can be made where intimidation is concerned they are rarely effective and can just aggravate the issue.

2-10% per month are usually no loan sharks, but normal lenders who usually require collateral/security for giving a loan. They also require proper loan agreements to be signed and in many cases register their loans with the land office as well (in case of land as collateral).

loan sharks do not document anything, only give small loans of a few thousand baht and charge something like 2-5% per day. They are the ones that intimidate borrowers if they cannot pay interest or pay back the loans.

[MAJIC]

If repayment is not an option, what can they do?

Since when has repayment not an option when borrowing money? I read somewhere a while ago the government has a service where they pay off the loans to sharks and set a reasonable monthly payment for the person to pay at low interest till the debt is paid. I think it is on a thread even here in Thai Visa do a little searching. But I would like to add never should a borrower feel repayment isnot an option.Repayment is the responsibility of borrowing.

Exactly correct for individuals....it's a pity some countries cannot see it the same way, like Greece for example....then again, shouldn't the lender be equally classed as "irresponsible" when lending money to people they know cannot possibly pay it back.

"then again, shouldn't the lender be equally classed as "irresponsible" when lending money to people they know cannot possibly pay it back."

Yes but from their point of view they are expecting to make money somewhere along the the line,if only a partial write off to taxes.

Greece is exeptional,judging by those smug grinning faces that hijacked the EU into giving a 3rd x bailout loan knowing full well they will never pay it back,it's the price of stopping the EU from collapsing completely! One could be forgiven for hoping that Greece goes down the Pan before the EU Payee's!