Lending money to a Thai relative, legal advise?

[douglasspade]

How do I cover myself if I lend money to a Thai relative? Actually how do an Expat cover himself when lending money to a Thai person in Thailand?

 

As an example: My GF's Auntie's roof is in disrepair as the rain season just hit. The rice season has only begun so the coffers are a bit dry. So are the rest of the family. Thy need 100K฿ urgently.

 

If I lend her 100K฿, what can I do legally to ensure I will get my money back? I do not want to be disrespectful, but I need to be legally rooted.

 

In my home country if you borrow/lend money you simply draft a detailed contract, get it stamped by the police, put the bank transfer slips with the contract, and it's a legal set of documents.

 

Thanks for reading and replying.

 

[Here It Is]

Legal coverage? Are you pulling my ahem?


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[SiamBeast]

Here's the best legal advice I can give you:

 

"Don't"

 

 

In Thailand, lending money means giving money.

[Here It Is]

OP - hindsight is a wonderful thing, but did you take a wrong turn and end up in LOS by accident?

 

 

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[tonray]

100,000 baht for a roof ? What size house and unless this is a real clay tile roof...that is pretty steep. 

[IDP1]

What is their roof made from, gold? How big is the roof and what is it made from? Aluminum sheets are not expensive and labor is dirt cheap. Even fiberglass roof tiles are not expensive.

 

Do not expect to get the money back. The police will laugh at you. Is she telling her aunt it's a loan or just a gift from the white man? In Isaan they think people are rich. Maybe she tells you it's a loan, but later you find it's more of a gift.

 

I actually just lent my uncle in law 50,000 baht which he paid back 5 weeks later. I said, you need to give back more, I'm not a charity. He sent me 51K back... Won't be lending him again, he thinks I'm rich at 25 years old. If her aunt needs 100K, she can probably get a loan from the bank, everyone in Isaan has debts for home improvements or similar.

[observer90210]

and what if you "slip" off a roof or a balcony once you give the money?

 

as for the corrupt Thai Police, don't expect anything out of them and even less from the legal system, as farangs seem to have absolutely no rights or protection in LOS

 

in other words..DON'T!!

[bluebluewater]

If you lend them the money you are about to get "rooted" legally!

[samsensam]

 

even my thai friends are extremely reluctant to lend money to fellow thais (apart from some with foreign bfs who want to show off their money).

 

not repaying a loan seems to be culturally acceptable here, sadly

 

if you must lend then only lend what you are prepared to lose.

[lemonjelly]

Buy them some buckets from the 20 baht shop to keep them going 'till harvest. 

[Chou Anou]

Alternate title for this thread: "Throwing money down the toilet and flushing it" 

[swissie]

For a Farang, it's hard to "secure a loan" on a commercial basis, so it will "hold water" in a Thai-Court of law.
A loan, involving a GF plus "Family-Members" is strictly a gift.

Unless it's an european-style mansion, re-roofing an average Thai-House is likely to cost less than 30K. Especially  if we are talking the standart corrugated tin-roof. And: If a Family needs an additional 70K to bridge over until the next harvest, they must be catering to a lavish life-style.

In short: By covering this expense now, be prepered, that you will be presented with other future bills on a regular basis.

-By now, you must realize, that you are not only involved with a Thai-GF, but with the entire GF's family!!!
Be assured, once you marry this GF, the financial demands by the family will not get less, but will increase.

A good time for you to do some profound thinking

To facilitate your "thinking": Thai-Population is around 70 Million. Half of them are women. I hope you get my drift....

Under these circumstances, no TVF-Member would object, if you would develop a strong interest in outbound Bus-Schedules.
Cheers.

[oldhippy]

How about this:

Tell them to ask the bank for a 6 months loan.

Should not be a problem for them, if they are solvent.

Promise them that you will pay the interest as a gift to them.

That way you will not lose your 100.000, it will cost you less than 5.000.

They save face and they cannot blame you for being unhelpful.

Make up some story why you have no cash available.

Of course, do not guarantee that bank loan.

[Bastos60]

Giving out personal loans is like gambling, only do it with money you can afford to lose.

[BEVUP]

5 hours ago, swissie said:

For a Farang, it's hard to "secure a loan" on a commercial basis, so it will "hold water" in a Thai-Court of law.
A loan, involving a GF plus "Family-Members" is strictly a gift.

Unless it's an european-style mansion, re-roofing an average Thai-House is likely to cost less than 30K. Especially  if we are talking the standart corrugated tin-roof. And: If a Family needs an additional 70K to bridge over until the next harvest, they must be catering to a lavish life-style.

In short: By covering this expense now, be prepered, that you will be presented with other future bills on a regular basis.

-By now, you must realize, that you are not only involved with a Thai-GF, but with the entire GF's family!!!
Be assured, once you marry this GF, the financial demands by the family will not get less, but will increase.

A good time for you to do some profound thinking

To facilitate your "thinking": Thai-Population is around 70 Million. Half of them are women. I hope you get my drift....

Under these circumstances, no TVF-Member would object, if you would develop a strong interest in outbound Bus-Schedules.
Cheers.

All are correct but this one points out you are being done over

But how can you fall for this if you have 90 posts on here, you musn't be reading

I also did a roof on the old village house & same as above (but only paid for roof )

You talk about them being a bit skint with cash due to the new rice season - Get use to it as the only way they grow rice is to get loans & their experts at dealing with banks EG: Women about 5 houses down in new Moo Baan says to wife about buying house "How many banks did you use" 

So has the direct family finished the nibbling & now it's the extended family & dont worry i see their testing for much bigger 

Answer = Colateral = Gold / or mortgage house (but house maybe mortgaged already )

 

[phuketrichard]

Thais consider loans from Farangs as gifts and seldom pay them back,

dont "LOAN" more than ur prepared to lose

[Ace of Pop]

Another Lamb to the Slaughter.


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[keeniau96]

Depends on the family. I very reluctantly have made four loans exceeding 100k baht and they have all been repaid. Slowly but each in less than 3 years. This is a long-time Phuket family with a seagoing tradition, so not really typical Thai in many ways.

[steven100]

tell them to go see '  loan-a-shark roof-repairs.com '    they can borrow the money there.

[timkeen08]

It really depends on the family but in my opinion only if it's your wife's family not your girlfriend. My wife helped her brother get a loan using her land title. We got $100,000 baht out of the deal when the loan was approved for the down on our new pickup. He paid the loan off in 3 months and we got the title back. Some Thai families help each other. We got loans and money gifts from family and friends when we went to Geneva to help my wife's niece going through chemo. We paid back the loans when we returned and brought gifts for everyone. Our family is always helping each other when cash flow issues occur. It's not just get it from the farang. As I said, it depends on the family but be wary of girlfriends. Not all Thai women are bad.

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[tonray]

6 minutes ago, steven100 said:

tell them to go see '  loan-a-shark roof-repairs.com '    they can borrow the money there.

It's very likely that part, if not all, of that 100K is going to pay off 'loans' already made. 

 

If you want to do something nice and they insist that the roof is the issue, hire a good roofer yourself,and pay him directly. If they balk at that then you know right away that the roof was not even remotely in their plans for the money.

[timkeen08]

It's very likely that part, if not all, of that 100K is going to pay off 'loans' already made. 
 
If you want to do something nice and they insist that the roof is the issue, hire a good roofer yourself,and pay him directly. If they balk at that then you know right away that the roof was not even remotely in their plans for the money.

Great idea

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[Kwasaki]

Sorry OP sounds like the common usual Thai family con, you've had the proper advice " NO ".

Even a legal way signing papers etc will not get your money back all you would get back is excuses.

[geriatrickid]

Don't do it.  Tell them that you have to send money home to take care of your own family.

Not worth the hassle and stress.

 

[elwood]

When we lived in a village some years ago, we made occasional loans. Those to relatives were without any contract. However, we made a loan to an old friend of my wife's, and she used land as collateral. The headman brought along a pad of pre-printed forms, which were filled in and signed by my wife and the friend, and witnessed by the Head Man. Payments were made regularly and completed on time. So we did this on another occasion using the same forms and with land as collateral.

 

A few years ago I needed a fair amount of money for an emergency; our friend and former landlord made the loan and again a proper form was used and this time I signed as recipient as well as my wife.

 

I am sorry that I cannot tell you the title of the form; I just wish to point out how the loan was covered and that there are forms available for such loans - maybe the headman could advise?

 

And, for the usual doom and gloom writers - all loans were paid on time and in full, including mine!

[NancyL]

To the OP::  Let's say you do make the loan, and it's done with a contract and collateral as has been suggested here.  Ask yourself what would you do if the loan isn't repaid on time?  Would you be willing to enforce the terms of the contract and sell the collateral if, for example, it was gold, and risk upsetting your GF and everyone in the family?  This assumes, of course, that you're still on good terms with your GF and want to remain that way.

 

Hubby and I were in a somewhat similar situation when my parents were in their mid-sixties and needed to be supervised a little more closely.  We asked them to move to our town, bought a little home for them and everyone agreed that they'd pay us rent each month from their pension income and my Dad's part-time job at a nearby store.  In trying to figure out how to set up this arrangement from a legal standpoint, both our accountant and lawyer advised against having them sign a rental agreement.  After all, what would we do if they fell behind on the rent -- toss them out on the street like a regular landlord would?  Instead, we handled their house as a second home, like a vacation home, for our tax purposes and their monthly payments to us as gift income.  

 

With this example, it's interesting that our lawyer turned down the opportunity to draft a rental contract.  Probably because he knew we'd never have the heart to enforce it and the paperwork involved in styling this arrangement as rental income for tax purposes was more hassle than it was worth.

 

 

[Morch]

I think it depends on the financial situation of the OP (or others in similar situations). There's an opinion often heard, advising foreigners not to invest more than they are ready to part with. I'd treat loans to family members along these lines, perhaps with greater risk factor.

 

As was pointed out, legally protecting oneself, in terms of paperwork and whatnot, is not an issue. Enforcing legalities if things go south is an altogether other matter, for various reasons.

 

With hindsight (yeah, been there done that), wouldn't loan (read give) such an amount without having first hand idea of the situation, and  what expenses are involved. Don't know that it is possible to follow the advice given above about hiring workmen by yourself, but probably not a problem to get specifics or insist on paying direct. This could mitigate some issues. Another thing, which may or may not be relevant is making it a family thing - like sharing the expense between siblings.

 

 

[Kwasaki]

1 hour ago, tonray said:

hire a good roofer yourself,and pay him directly

I would say NO if OP has no construction knowledge.

Probably cost more once Auntie cuts him in on the deal. 

[wildewillie89]

If they have a stable half decent salary where they can actually pay you back you may consider it. I would't, however, others may. It should only ever be very close members (immediate family or the very odd cousin). Within my Thai family, money is generally only given to the closest members they see on a daily basis, so it always has to be returned.  I get the idea of people not paying people back though. Small amount they usually pay back, big amounts it seems not so much. 

The family also should have protected you instantly when you arrived (against other family/friends etc). The first few weeks I was there, some neighbours spoke about money. It was immediately said, this farang has no money, or spun a story about all his money needs to go back to his own family back home - or he spent all the money on the house (which the wife has a loan for). 

 

Have never been asked for a baht since I arrived, and had the assurance the family would never expect a baht no matter how tough times got.  But they also know I don't have any money. There is a running joke at the nephews school that I am the only farang in the world that is not rich (would be funny if it wasn't so sad - me not having money, and Thais expectations of Westerners).  

Edited June 13, 2017 by wildewillie89

[balo]

If your relatives can't afford to fix a roof , they must be very poor. And in  their eyes you are probably very rich.  If you love your family , give them 100k as a "loan" , but don't expect anything back .

If 100k is too much for you and you can't afford losing it , then just say NO.