Can courts enforce loan shark debts?

[TPI]

15 hours ago, cyberfarang said:

Cannot agree with you on this one.

 

For example; if I lend you 50000 baht as a private individual not as a registered loan company, with a written agreement of the installments and payback period that involves 90% interest on the loan I lend you and you sign on the dotted line,  then that is a contract, legal and binding. And if you put something up as collateral, a property, vehicle or anything of value that covers the full loan I lend you and you default on the loan, I have a legal right to lay claim to it. In fact I could lay claim to anything you have of value if unable to pay back the loan in monies as par agreement.

 

Another example is; if I was a part of a money lending gang and preferred a fast track method of sending round the heavy mob to persuade you to pay up rather then go through the long drawn out legal system, then I would guess in most cases the debtors will be too afraid to report the matter in-case they may end up as part of a concrete pillar supporting a flyover somewhere. So people who use loan sharks to borrow money should know exactly what they are getting into. Is a little like selling the soul to the devil, reap the benefits now, and suffer the consequences later on.

I agree, a widowed neighbour borrowed THB 700,000 to build a house on her land for her son. The son was supposed to service the loan.......! The Thai gentleman who lent the money was expecting the interest money to be paid at a rate of 2.5% of the principle per month and that loan not to be paid until the total amount plus that months payment, as a lump sum,  was received!

"Loan Sharking"...you bet! However, the son failed to make the payments and as there was a "contract" the court upheld the gentleman's claim and turfed the widow and her two young daughters off the property! Please don't confuse Justice with the Law in the Land of smiles!

[xen]

I agree with  both Kaleevala and Robblok  except the Thais i know call it a syndicate  and to join all members must buy a position by investing money into it  if there is a vacancy and by invitation .. This gives them a right to borrow from the money jar , if there is any left, but there is an interest involved, not a percentage amount , but a fixed amount for every predetermined unit you borrow. For example it could be 200 baht for every 1000 baht borrowed and this can be calculated weekly so it adds up quite quickly . If they are not smart enough to see the dangers of this arrangement then a  lot of them would also have other debts to service as well as their living expenses . Basically not smart enough to handle their own finances .

 

So they disappear  with the money and the interest owing because they have no hope of  ever repaying  this debt or any of their other debts . I have had to chase up a few absconders just to prevent it escalating  and to keep the peace ( usually staff in our Thai Restaurants )  so business wasn't disrupted by these disputes . . Felt sorry for them when i came knocking on their doors especially when  they didn't think they would be found.  At least i gave them a chance  to come to an arrangement  (and a lot of them were our friends too ) because there were always others (Thais or others ) who thought they were gangsters looking for them too . No legal contracts and no legal solutions.

 

Usually they resort to these syndicates because they are finding it too difficult to get loans from other more legit sources .These syndicates cause so many problems between friends, family, and workplaces etc. . The Thais are usually very secretive about them but they are everywhere in Thai, Chinese, Indian and Vietnamese  expat communities  that i know of in Australia and anywhere else there are Asian Communities no doubt, and they are always underground and they are always  secretive about them in Thailand  and all Asian communities as they are deemed to be loansharking  by authorities  . They cause so many problems  .

Edited January 10, 2017 by xen

[Dagnabbit]

10 hours ago, stevenl said:

That contract would be against the law and therefore illegal.

Sent from my ROBBY using Thaivisa Connect mobile app
 

 

Nope. Thai stationary companies sell pre-printed forms to use for lending friends money.

 

Have used them myself a couple of times to loan out money and get it back.

[scorecard]

10 hours ago, stevenl said:

That contract would be against the law and therefore illegal.

Sent from my ROBBY using Thaivisa Connect mobile app
 

 

Further, a loan agreement between two private individuals may be seen differently by the courts compared to 'private loan agreements' between one lender and 200 borrowers, possibly becomes a different category. 

[scorecard]

42 minutes ago, xen said:

I agree with  both Kaleevala and Robblok  except the Thais i know call it a syndicate  and to join all members must buy a position by investing money into it  if there is a vacancy and by invitation .. This gives them a right to borrow from the money jar , if there is any left, but there is an interest involved, not a percentage amount , but a fixed amount for every predetermined unit you borrow. For example it could be 200 baht for every 1000 baht borrowed and this can be calculated weekly so it adds up quite quickly . If they are not smart enough to see the dangers of this arrangement then a  lot of them would also have other debts to service as well as their living expenses . Basically not smart enough to handle their own finances .

 

So they disappear  with the money and the interest owing because they have no hope of  ever repaying  this debt or any of their other debts . I have had to chase up a few absconders just to prevent it escalating  and to keep the peace ( usually staff in our Thai Restaurants )  so business wasn't disrupted by these disputes . . Felt sorry for them when i came knocking on their doors especially when  they didn't think they would be found.  At least i gave them a chance  to come to an arrangement  (and a lot of them were our friends too ) because there were always others (Thais or others ) who thought they were gangsters looking for them too . No legal contracts and no legal solutions.

 

Usually they resort to these syndicates because they are finding it too difficult to get loans from other more legit sources .These syndicates cause so many problems between friends, family, and workplaces etc. . The Thais are usually very secretive about them but they are everywhere in Thai, Chinese, Indian and Vietnamese  expat communities  that i know of in Australia and anywhere else there are Asian Communities no doubt, and they are always underground and they are always  secretive about them in Thailand  and all Asian communities as they are deemed to be loansharking  by authorities  . They cause so many problems  .

 

 

Well aware of that, naive distant Thai nephew started work at a high profile gov't. high school in Bkk a few years back, same day he started the 'in-house' loan shark privately approached him to announce her loan services along with a claim that it was school policy that teachers at that school were not allowed to borrow from anybody except her.

 

He was shocked and a bit intimidated and quickly shared the item with my Thai son. My son's comment 'stay well aware from her and tell absolutely nobody in the school anything about your private business'. 

[cracker1]

18 hours ago, cyberfarang said:

Cannot agree with you on this one.

 

For example; if I lend you 50000 baht as a private individual not as a registered loan company, with a written agreement of the installments and payback period that involves 90% interest on the loan I lend you and you sign on the dotted line,  then that is a contract, legal and binding. And if you put something up as collateral, a property, vehicle or anything of value that covers the full loan I lend you and you default on the loan, I have a legal right to lay claim to it. In fact I could lay claim to anything you have of value if unable to pay back the loan in monies as par agreement.

 

Another example is; if I was a part of a money lending gang and preferred a fast track method of sending round the heavy mob to persuade you to pay up rather then go through the long drawn out legal system, then I would guess in most cases the debtors will be too afraid to report the matter in-case they may end up as part of a concrete pillar supporting a flyover somewhere. So people who use loan sharks to borrow money should know exactly what they are getting into. Is a little like selling the soul to the devil, reap the benefits now, and suffer the consequences later on.

I believe this is not true as the Government has set the maximum interest rate a private lender can charge and it is much nearer 3% than the 90% quoted in this story.

The Courts would never support a case where the lender was asking for recourse on a debt with a 90% interest rate.

[cracker1]

18 hours ago, cyberfarang said:

Cannot agree with you on this one.

 

For example; if I lend you 50000 baht as a private individual not as a registered loan company, with a written agreement of the installments and payback period that involves 90% interest on the loan I lend you and you sign on the dotted line,  then that is a contract, legal and binding. And if you put something up as collateral, a property, vehicle or anything of value that covers the full loan I lend you and you default on the loan, I have a legal right to lay claim to it. In fact I could lay claim to anything you have of value if unable to pay back the loan in monies as par agreement.

 

Another example is; if I was a part of a money lending gang and preferred a fast track method of sending round the heavy mob to persuade you to pay up rather then go through the long drawn out legal system, then I would guess in most cases the debtors will be too afraid to report the matter in-case they may end up as part of a concrete pillar supporting a flyover somewhere. So people who use loan sharks to borrow money should know exactly what they are getting into. Is a little like selling the soul to the devil, reap the benefits now, and suffer the consequences later on.

I believe this is not true as the Government has set the maximum interest rate a private lender can charge and it is much nearer 3% than the 90% quoted in this story.

The Courts would never support a case where the lender was asking for recourse on a debt with a 90% interest rate.

[timewilltell]

5 hours ago, FritsSikkink said:

A loan shark gets 20% per month here not 3%.

Here something to read that proves it is illegal:

 

 

Yes you are talking about small debts - I am talking about big ones that destroy families.  When you calculate the fees and advance / doubled interest it is more like 7% a month on several million and they already own the house under the Sale with Right of Redemption law - which is of course thoroughly abused and misused but the judges swayed by the arguments of corrupt and big wig lawyers trying to protect the illegal business of their scumbag money lender clients.

[stevenl]

 

Nope. Thai stationary companies sell pre-printed forms to use for lending friends money.

 

Have used them myself a couple of times to loan out money and get it back.

So? Still illegal if interest is higher than legally allowed, which it is in the example I reacted to.

Sent from my ROBBY using Thaivisa Connect mobile app

[sanuk711]

22 hours ago, Global Guy said:

My confusion (yes, I know anything can be bought in the legal system here) is how the hell can police/court pursue criminal charges to enforce a criminal act from one law breaker to another law breaker? It's like one criminal who wasn't caught just walking into a police station and pointing the finger at someone for doing the same thing, they implicate themselves in the process.

Prostitution is illegal here---try not paying the girl the next morning--& the police will sort it out for you. On loans--if it goes to court they can sometimes reduce the % (dok Beer) to 16% which is the highest amount you can legally charge. But they do take the view (I think correctly) that with prostitution or Loans -- that you are an adult that entered into an agreement, that agreement should be honoured, not slipped out of on technicalities or small print.

[cracker1]

18 minutes ago, sanuk711 said:

Prostitution is illegal here---try not paying the girl the next morning--& the police will sort it out for you. On loans--if it goes to court they can sometimes reduce the % (dok Beer) to 16% which is the highest amount you can legally charge. But they do take the view (I think correctly) that with prostitution or Loans -- that you are an adult that entered into an agreement, that agreement should be honoured, not slipped out of on technicalities or small print.

I think the 16% you quote as the law, is an annual interest rate, but Thai's get confused between Daily, Weekly, Monthly. and Term rate.

[Grubster]

9 hours ago, pennine said:

What about gold shops charging 4% per month on money lent against gold deposited? Is that legal?

It is in the USA, I don't know about here. Pawn shop laws.

[Rc2702]

21 hours ago, cyberfarang said:

Cannot agree with you on this one.

 

For example; if I lend you 50000 baht as a private individual not as a registered loan company, with a written agreement of the installments and payback period that involves 90% interest on the loan I lend you and you sign on the dotted line,  then that is a contract, legal and binding. And if you put something up as collateral, a property, vehicle or anything of value that covers the full loan I lend you and you default on the loan, I have a legal right to lay claim to it. In fact I could lay claim to anything you have of value if unable to pay back the loan in monies as par agreement.

 

Another example is; if I was a part of a money lending gang and preferred a fast track method of sending round the heavy mob to persuade you to pay up rather then go through the long drawn out legal system, then I would guess in most cases the debtors will be too afraid to report the matter in-case they may end up as part of a concrete pillar supporting a flyover somewhere. So people who use loan sharks to borrow money should know exactly what they are getting into. Is a little like selling the soul to the devil, reap the benefits now, and suffer the consequences later on.

Is this this yumnum type deal with Amphur I have read about?

[sanuk711]

2 hours ago, cracker1 said:

I think the 16% you quote as the law, is an annual interest rate, but Thai's get confused between Daily, Weekly, Monthly. and Term rate.

 

Yes it is the annual rate cracker --which is always quoted in the west--but you are right they (the private loaners ) do mainly quote monthly rates.

There are 3 types of loans here (Thailand)

 

  Kai-Far ...which is 100% safe so is often quoted at a much lower rate.

Jum Nong...which is much like a Bank Mortgage---not as safe as the first

Gooul Ngein ....completely unsafe, with no goods or collateral to back it up, therefore very high interest rates and big men to enforce.

 

I am sure I have spelt every one of them wrong---its just how I hear them pronounced to my tone deaf ear,,,,

[MyFriend You]

16 hours ago, pennine said:

What about gold shops charging 4% per month on money lent against gold deposited? Is that legal?

No

[bastco]

I would like some information from a legally qualified or experienced person on foreclosing on a private mortgage contract which was registered at the local Land Office. The mortgage was for one year which finished recently. The borrowers have paid their agreed monthly amount mostly on time but for the last few months have started lagging behind. I have seen online where a new foreclosure law 729/1 of the Thai Civil & Criminal Code was approved and is now in effect. This law I understand eliminates the need for Court involvement and can allow the Borrower to authorize the Lender to sell the land if they can not repay the debt. If the Borrower refuses to repay the debt and does not authorize  the Lender to sell the property for which the Lender has the Title Deed (Chanot) what course of action does the Lender now have. 

[bastco]

I apologise for an error in my post. I should have said Thai Civil & Commercial Code Amendment to Foreclosure Law 729/1 legally in effect February 2017.

[bbi1]

Don't know if "courts enforce loan shark debts" but I'm sure there are lots of thugs out there that enforce loan shark debts. Most likely in different ways than courts...