Bankruptcy Law in Thailand. The Thai economy, while boasting impressive growth, can be a challenging landscape for businesses and individuals alike. In the face of financial difficulties, understanding Thailand's bankruptcy law becomes crucial.

Thailand's Bankruptcy System: A Creditor-Driven Process

Unlike some jurisdictions, Thailand operates an involuntary bankruptcy system. This means creditors, not debtors, initiate bankruptcy proceedings. If a creditor believes a debtor is insolvent (meaning they cannot pay their debts), they can petition the Bankruptcy Court to declare the debtor bankrupt.

Who Can File for Bankruptcy?

Only creditors can file a petition. There is no provision for voluntary bankruptcy under Thai law. However, the minimum debt amount required for a creditor to initiate proceedings varies:

• Individuals: Creditors must claim at least 1 million Thai baht owed by the debtor.
• Juristic Persons (Businesses): The minimum debt threshold for businesses is 2 million Thai baht.

Key Aspects of Thai Bankruptcy Law

Several key aspects define bankruptcy proceedings in Thailand:

• Presumption of Insolvency: While there's no strict definition of insolvency, courts often consider a debtor insolvent if their assets are insufficient to cover their debts. Failure to repay debts after receiving creditor notices can also be seen as a presumption of insolvency.
• Absolute Receivership Order: If the court deems the debtor insolvent and approves the petition, they may issue an Absolute Receivership Order (ARO). This order grants control of the debtor's assets to an Official Receiver, who manages and distributes those assets to creditors.
• Debt Repayment and Rehabilitation: Thailand's bankruptcy law allows for debt rehabilitation in some cases. This process involves restructuring the debtor's finances to facilitate debt repayment over time.
• Discharge from Bankruptcy: Depending on the specific circumstances, debtors may be discharged from bankruptcy after a set period, full debt settlement, or liquidation of a significant portion of assets to pay creditors. However, dishonest behavior, such as continuing business operations while insolvent, can hinder discharge.

Seeking Legal Counsel

Bankruptcy proceedings in Thailand can be complex. For both creditors and debtors, consulting with a qualified Thai bankruptcy lawyer is crucial. A lawyer can advise on the best course of action, navigate the legal process, and protect your rights throughout the proceedings.

Conclusion

Thailand's bankruptcy law offers a framework for dealing with financial insolvency. While the process can be challenging, understanding its key features and seeking legal guidance can help individuals and businesses navigate difficult financial situations effectively.