By: Magna Carta Law Office
Bankruptcy is a legal proceeding involving a person or business that is unable to repay outstanding debts. Under Thai law, bankruptcy is an involuntary act whereby the law causes the assets of a debtor to be distributed among its creditors to repay a portion of outstanding debt.
Any creditor owed more than 1 Million Baht by an individual debtor or more than 2 Million Baht by a corporate debtor may file a bankruptcy action against such debtor. However, the debtor must first be proven insolvent.
It shall be presumed that the debtor is insolvent if any of the following proceedings occur:
If the debtor transfers property or rights in the management of his property to others for the benefit of all his creditors whether such be done within or outside Thailand;
If the debtor transfers his assets with dishonest intent or fraud, whether such be done within or outside Thailand;
If the debtor transfers his property or creates any right over such property which, if the debtor were a bankrupt, would be deemed an act of preference, whether such act be done within or outside Thailand;
If the debtor does any of the following things in order to avoid or delay payment of his debt:
Leaves or remains outside Thailand;
Leaves the premises in which he has resided, or conceals himself in any premises, or absconds, or closes his place of business;
Removes assets out of the jurisdiction of the Court;
Consents to a judgment ordering the payment of money which he should not pay;
If the debtor has had his property seized under a writ of execution, or there is no property of any kind capable of being seized for the payment of the debt;
If the debtor informs any of his creditors, or the court in any action that he cannot pay his debts;
If the debtor submits a proposal for the compromise on his debts to any two or more of his creditors;
If the debtor informs any of his creditors that he cannot pay for such debt;
If the debtor receives demands from his creditor to pay his debt not less than twice, at intervals of not less than thirty days, and does not pay the debt.
An individual who is adjudged to be bankrupt shall be immediately discharged from bankruptcy after the lapse of 3 years from the date of adjudication by the court. However, if such a person has had a previous bankruptcy within 5 years, the automatic discharge period will be extended to 5 years. In cases of dishonest bankrupts, the court may extend the period to 10 years, except in cases of special conditions on the request filed by the Official Receiver or the bankrupt person. In cases of offense on misappropriation or cheating on borrowings from the public, the automatic discharge period is extended to 10 years.