Thai Guarantor - What Happens Now?

[Generalchaos]

If a Thai parent guarantees a loan for her son on a car purchase, then the son defaults on the payment - what are the steps that can legally be taken to recover the debt?

I have been told that the guarantor will be arrested and locked up! Anyone know if this is correct?

Thanks.

[TheSiemReaper]

Debt in Thailand as with pretty much everywhere (except the Gulf of Arabia) is a civil matter. You cannot be jailed for debt unless it involves a crime (such as a bounced check or straight up fraud).

[Generalchaos]

Debt in Thailand as with pretty much everywhere (except the Gulf of Arabia) is a civil matter. You cannot be jailed for debt unless it involves a crime (such as a bounced check or straight up fraud).

Thanks for that. I suppose that they will just take property etc. to try to recover the debt?

[CharlieH]

Many factors involved, depends on the amount and circumstances. If any form of paperwork was signed regarding collateral (house/land).

In my experience, after a few letters, next comes Court (Sarn in Thai) where an agreement is usually reached. If defaulted on, then if applicable, application is made to seize assets.

[Kwasaki]

http://www.tilleke.com/resources/enforcement-loan-guarantees-change-under-new-laws

[Pib]

The company/person making the loan now takes legal action against the guarantor (a.k.a., co-signer).

[Generalchaos]

Thanks for all the information.

It appears that the loan is from a bank, not a finance company. It now looks like the Thai Guarantor has used 2 chanotes that are not in her name, they are in fact solely owned by MY son (15 years old) Surely the bank cannot try to reposses his land because of his mothers use of the chanotes?

[daveAustin]

Don't you just love it when Thai spouses guarantee willy-nilly! If she is the mother/legal guardian, perhaps, though these should have been under lock & key really.

[Generalchaos]

Don't you just love it when Thai spouses guarantee willy-nilly! If she is the mother/legal guardian, perhaps, though these should have been under lock & key really.

Totally agree, they give no thought whatsoever as to what they are getting into.

Hence the reason that I made sure that the only name on the Chanote is my son's - The land cannot be sold until he is 21, so I don't see how the bank has any right to it whatsoever, my son has signed nothing, he knows nothing about it.

[Pib]

Just because the son has defaulted/stopped paying on the loan does not mean the bank will give up in trying to collect from him and the guarantor.

Hard to believe the bank accepted chanotes not in the guarantor's name unless something fraudulent occurred. But maybe the chanotes were not accepted as collateral but as info to support the loan at the time and the bank didn't confirm true ownership of the chanotes.

Edited May 26, 2016 by Pib

[MaeJoMTB]

Thanks for all the information.

It appears that the loan is from a bank, not a finance company. It now looks like the Thai Guarantor has used 2 chanotes that are not in her name, they are in fact solely owned by MY son (15 years old) Surely the bank cannot try to reposses his land because of his mothers use of the chanotes?

Loans are not allowed against property owned by those under 21 years of age in Thailand.

So you have no problem.

Always remember your wife may be lying to you in order to extort money.

Sadly you can't trust her to tell you the truth about loans, legality, or guarantees.

How do you know the loan exists? She told you!

[CharlieH]

Go see a "Thanai" (lawyer) get correct and appropriate legal advice.

Its possible that as a "minor" and her being his mother she may have some rights, but get it checked out (and adjusted) accordingly is my advice.

[Generalchaos]

Just because the son has defaulted/stopped paying on the loan does not mean the bank will give up in trying to collect from him and the guarantor.

Hard to believe the bank accepted chanotes not in the guarantor's name unless something fraudulent occurred. But maybe the chanotes were not accepted as collateral but as info to support the loan at the time and the bank didn't confirm true ownership of the chanotes.

I think you might be correct there! (Accepted as support) Certainly nothing fraudulent was done.

Edited May 26, 2016 by Generalchaos

[Generalchaos]

Go see a "Thanai" (lawyer) get correct and appropriate legal advice.

Its possible that as a "minor" and her being his mother she may have some rights, but get it checked out (and adjusted) accordingly is my advice.

I already checked this at the land registry, other than her applying to the court for a court order, the chanotes cannot be touched until he is 20 or 21. Thanks for the input.

It appears the debtor has hidden the car and has switched off the phone. I have tried to tell them just to contact the bank and offer anything, I imagine the last thing the bank wants is the car back - Even if they offered half the monthly payments and had the loan extended it would be a lot simpler - But try telling that to a Thai!

[TheSiemReaper]

This may turn out to be a bit of a problem. If the chanotes were used as security and could not be used as security for the loan - that might turn out to be fraud (you'd need to speak to a Thai lawyer to confirm/deny on this - it's a best guess not a fact) and the wife might be looking at jail time.

[Generalchaos]

Thanks for all the information.

It appears that the loan is from a bank, not a finance company. It now looks like the Thai Guarantor has used 2 chanotes that are not in her name, they are in fact solely owned by MY son (15 years old) Surely the bank cannot try to reposses his land because of his mothers use of the chanotes?

Loans are not allowed against property owned by those under 21 years of age in Thailand.

So you have no problem.

Always remember your wife may be lying to you in order to extort money.

Sadly you can't trust her to tell you the truth about loans, legality, or guarantees.

How do you know the loan exists? She told you!

Ha ha! No, I am usually the person that signs for the registered letters from the SCB!

She knows I am giving them nothing, they have done this sort of thing before (there are two of them both with jobs!) They defaulted on a motorbike not too long ago.

They need to face the consequences, sadly they just bury their heads in the sand.

My wife is absolutely FURIOUS!!!

[Berkshire]

Go see a "Thanai" (lawyer) get correct and appropriate legal advice.

Its possible that as a "minor" and her being his mother she may have some rights, but get it checked out (and adjusted) accordingly is my advice.

I already checked this at the land registry, other than her applying to the court for a court order, the chanotes cannot be touched until he is 20 or 21. Thanks for the input.

It appears the debtor has hidden the car and has switched off the phone. I have tried to tell them just to contact the bank and offer anything, I imagine the last thing the bank wants is the car back - Even if they offered half the monthly payments and had the loan extended it would be a lot simpler - But try telling that to a Thai!

Confusing. So the debtor (your wife's son?) is defaulting on this loan and can't be contacted? If the deadbeat debtor is not willing to pay, then the guarantor must. If I was the bank, I would be coming after both the debtor and the guarantor...including the guarantor's husband. Any and all assets would be fair game.

[happy chappie]

I think it's time to find a new family.you should of learned the first time.never let them have the papers for anything.it will come down to being your fault as your the farang.its a Thai bs thing to dodge the problem.

[fletchsmile]

Not entirely clear on your situation, but are you saying:

Your wife's son took out a loan to buy a car. Your wife guaranteed the loan for her son. In addition, your wife used Chanotes in your son's name as collateral for the loan. Your son is a minor as he's only 15 years old?

How old is your wife's son BTW? I assume he's not a minor?

Edited May 26, 2016 by fletchsmile

[Generalchaos]

Not entirely clear on your situation, but are you saying:

Your wife's son took out a loan to buy a car. Your wife guaranteed the loan for her son. In addition, your wife used Chanotes in your son's name as collateral for the loan. Your son is a minor as he's only 15 years old?

How old is your wife's son BTW? I assume he's not a minor?

Almost,

I have a son (Thai) with my Thai wife, he is 15 and the chanotes are in his name.

She has a grown up son from another marriage who is in his 30's - he is the debtor. He doesn't live near us and he and his wife we very rarely see.

It appears that the chanotes were shown as a sort of "good faith" type of gesture. Crazy really for the bank to make a loan like this when the guarantor has no sort of proof of income.

You can't help these people, they never listen and just go there merry way. At the end of the day she is the guarantor, she has her own land in her own name, so if they have to sell it then so be it.

I am just making sure that no one can touch the land from my son, that is all, the rest of them can do what they like.

[Generalchaos]

Go see a "Thanai" (lawyer) get correct and appropriate legal advice.

Its possible that as a "minor" and her being his mother she may have some rights, but get it checked out (and adjusted) accordingly is my advice.

I already checked this at the land registry, other than her applying to the court for a court order, the chanotes cannot be touched until he is 20 or 21. Thanks for the input.

It appears the debtor has hidden the car and has switched off the phone. I have tried to tell them just to contact the bank and offer anything, I imagine the last thing the bank wants is the car back - Even if they offered half the monthly payments and had the loan extended it would be a lot simpler - But try telling that to a Thai!

Confusing. So the debtor (your wife's son?) is defaulting on this loan and can't be contacted? If the deadbeat debtor is not willing to pay, then the guarantor must. If I was the bank, I would be coming after both the debtor and the guarantor...including the guarantor's husband. Any and all assets would be fair game.

If I was the bank I would be after the debtor and the guarantor too! But they will get absolutely nothing from me! I signed nothing, I have nothing to do with their loans - That is why it is called a "Personal Loan".

[Berkshire]

Go see a "Thanai" (lawyer) get correct and appropriate legal advice.

Its possible that as a "minor" and her being his mother she may have some rights, but get it checked out (and adjusted) accordingly is my advice.

I already checked this at the land registry, other than her applying to the court for a court order, the chanotes cannot be touched until he is 20 or 21. Thanks for the input.

It appears the debtor has hidden the car and has switched off the phone. I have tried to tell them just to contact the bank and offer anything, I imagine the last thing the bank wants is the car back - Even if they offered half the monthly payments and had the loan extended it would be a lot simpler - But try telling that to a Thai!

Confusing. So the debtor (your wife's son?) is defaulting on this loan and can't be contacted? If the deadbeat debtor is not willing to pay, then the guarantor must. If I was the bank, I would be coming after both the debtor and the guarantor...including the guarantor's husband. Any and all assets would be fair game.

If I was the bank I would be after the debtor and the guarantor too! But they will get absolutely nothing from me! I signed nothing, I have nothing to do with their loans - That is why it is called a "Personal Loan".

Understand. What I meant was assets in her name, e.g., your home, joint bank accounts, etc. Your other post provided some clarity, i.e., her 30 yr old son from a previous marriage. Clearly, this has nothing to do with you. But if it's something your wife is grappling with, you may be along for the ride. Shame that a son would do this to his mom.

[Pib]

I'm assuming the bank's name is on the vehicle Blue Book which means the vehicle serves as the main collateral...but in making the loan the bank may also ask for other supporting documents/collateral in case the value of the repossessed vehicle when resold would not cover the remaining balance of the loan which is a high possibility considering the vehicle could be totaled in a crash or stolen with insufficient insurance, etc. If the bank's name is on the Blue Book it will be looking to take the vehicle back if it can't get the borrow and guarantor to make payment...and then continue to come after both to make up any shortfall. But if the vehicle is in the son's name only, then it must have been a Personal Loan versus a loan using the vehicle as collateral.

Don't worry about this Son being unique in not paying off a loan...two of my in-laws at this very moment who have similar situations with their sons and daughters...and it indeed causes family problems, huge arguments, etc. In one case the father (the guarantor) has already went to another bank to get a Personal Loan to pay the other bank which was coming after the son's bad loan.

[fletchsmile]

Not entirely clear on your situation, but are you saying:

Your wife's son took out a loan to buy a car. Your wife guaranteed the loan for her son. In addition, your wife used Chanotes in your son's name as collateral for the loan. Your son is a minor as he's only 15 years old?

How old is your wife's son BTW? I assume he's not a minor?

Almost,

I have a son (Thai) with my Thai wife, he is 15 and the chanotes are in his name.

She has a grown up son from another marriage who is in his 30's - he is the debtor. He doesn't live near us and he and his wife we very rarely see.

It appears that the chanotes were shown as a sort of "good faith" type of gesture. Crazy really for the bank to make a loan like this when the guarantor has no sort of proof of income.

You can't help these people, they never listen and just go there merry way. At the end of the day she is the guarantor, she has her own land in her own name, so if they have to sell it then so be it.

I am just making sure that no one can touch the land from my son, that is all, the rest of them can do what they like.

Parents have various rights like being able to legally represent their child, or manage the property of a child.

However, a parent isn't allowed to mortgage a child's immovable property, sell it, etc unless they have a court order that permits them to do so. I very much doubt your wife got a court order, as that wouldn't be easy at all and it would also require things like demonstrating it's in the interests of the child.

I really don't think the bank would accept it as collateral either. That part of it all sounds odd to me. Credit underwriting departments of banks don't generally like lending against property of minors. The reason being is that their legal experts in the bank will be familiar with the difficulties around doing so and the laws in question. So their legal teams will ensure that that laws are reflected in their credit underwriting standards.

The legal stuff around this is in the Thai Civil and Commercial code.

In your shoes I'd take the Chanotes and put them out of reach of anyone. People often have a habit of finding ways around the law in Thailand whether legal or otherwise. If they're in your possession and out of reach, you stop anyone by-passing laws which protect your son.

As for your wife. Yes the bank can go after her as guarantor. You might want to think also about assets, like bank accounts, that you have in joint names that she could use to pay the debts. Very common for Thai parents to bail out the actions of their stupid kids, whether or not they can afford to.

Cheers

Fletch

[whatproblem]

My ex wanted to guarantee a loan for her sister and husband ,I said no ,2 moths later the husband left with the car and the sister left with the debt

[daveAustin]

I have a similar thing going on within my sphere at the moment, but, if it comes to it, will be b*ggered if I'll pay for someone else's naivety and, more importantly, some deadbeat with property and assets that would still pass the buck. Luckily, I have very few assets left here. People the world over are inept when it comes to money, but some Thais (not bashing, just stating fact) leave them all for dead.

[ozyjon]

What a mess, if you can't afford it,,,

[Generalchaos]

I'm assuming the bank's name is on the vehicle Blue Book which means the vehicle serves as the main collateral...but in making the loan the bank may also ask for other supporting documents/collateral in case the value of the repossessed vehicle when resold would not cover the remaining balance of the loan which is a high possibility considering the vehicle could be totaled in a crash or stolen with insufficient insurance, etc. If the bank's name is on the Blue Book it will be looking to take the vehicle back if it can't get the borrow and guarantor to make payment...and then continue to come after both to make up any shortfall. But if the vehicle is in the son's name only, then it must have been a Personal Loan versus a loan using the vehicle as collateral.

Don't worry about this Son being unique in not paying off a loan...two of my in-laws at this very moment who have similar situations with their sons and daughters...and it indeed causes family problems, huge arguments, etc. In one case the father (the guarantor) has already went to another bank to get a Personal Loan to pay the other bank which was coming after the son's bad loan.

Well, I thought the same thing, but the banks name is NOT on the book, it is in his name! Crazy eh?

The bank has absolutely no recall to the car.

The annoying thing is that the loan was only 5k Baht per month, divided by two 30 year olds that both had jobs. For whatever reason they simply stopped paying, never told anyone, and continued not to pay now for 5 MONTHS!

The SCB has not issued court papers so they are very lucky, but what should have been a 25K debt for the 5 months is now 47K.

As far as I am concerned they can go and take a hike, they won't see one Baht from me. I have a neice from the same family, she told me today that this is the sort of reason that she will never live over here with them as they have no idea of responsibility - She cannot wait to get the hell out of Dodge and get back to Australia.

Anyone can come on hard times, maybe be short of cash for a month or so, but to not pay a penny back to the bank for 5 months is disgusting - What did they do with the 5K they normally paid for the loan? Lao Kao and Karakoe?

Edited May 26, 2016 by Generalchaos

[Generalchaos]

I have a similar thing going on within my sphere at the moment, but, if it comes to it, will be b*ggered if I'll pay for someone else's naivety and, more importantly, some deadbeat with property and assets that would still pass the buck. Luckily, I have very few assets left here. People the world over are inept when it comes to money, but some Thais (not bashing, just stating fact) leave them all for dead.

Man, I know what you mean, they have absolutely no idea of consequence, it is the Mai Bpen Rai attitude every time. If you confront their stupidity they take the huff and the Kreng Jai crap comes in, then they end up bawling in tears like 5 year olds when they realise they are stuffed! If you can't pay for it DON'T BUY IT!

I am in my 50's, I have only ever once in my life had a new car, and that was a company vehicle. I drive around in a 15 year old Toyota, it is what I can afford.

I used to try and help out if I could but enough is enough. The only thing I need to make sure is that my son has the land I paid for and that no one can touch it / sell it. I am too old to be putting up with this shit.

[Generalchaos]

I agree with the sentiments, it stinks -

Indeed, how a son would do that to his own mother! But they were brought up by the grandparents, they never worked, barely went to school and everything to these little shits was a freebie handout. So as they grew older, that is what they expected, everytime they buggered up they expected someone else to pay.

Years back when I was not long out here, the same worthless dog of a son told us all he had finally secured a job, however, the job was driving a truck. The company that gave him a job wanted some sort of guarantee payment of 5K Baht, in case of damage or theft of the truck. I STUPIDLY helped him out and paid the guarantee. Three days later he quit the job because all he thought he was going to do was sit on his lazy arse all day and drive the truck - Turned out the company actually wanted him to get out of the truck every now and again and carry a few bags of cement. This was obviously too much like hard work so he quit.....who lost the deposit? Not him that is for sure. Jesus don't get me started, they make me sick!