Bankruptcy Act in Thailand

Bankruptcy

BankruptcyBeing an individual person or a juristic person entails the obligation to perform particularly in financial debt. If there are many creditors after to claim financial debts from such a person as the debtor, it would be difficult to receive the debts equally and fairly. Many countries, therefore, enact bankruptcy laws to decrease these problems and manage all debts of the debtor to be settled so that the debtor can further carry on their business efficiently.

Under the Thai Bankruptcy Act B.E. 2483 (1940) (the “Act”) it is declared that if a debtor becomes insolvent, a creditor shall have the right to file a bankruptcy case if any individual debtors owe a debt of not less than 1 million baht or a juristic person owes a debt not less than 2 million baht and if it is deemed as the debt having specific amount whether it was or will be due in the future, he/she may be considered bankrupt under the Act.

There are 3 kinds of persons who have the right to file a bankruptcy case to the Bankruptcy Court;
1. A secured or non-secured creditor,
2. An auditor and;
3. Thai asset management companies.

At the trial of a bankruptcy action upon the creditor’s charge, the Court must be satisfied with the facts that the debtor becomes insolvent together with other provisions of the law as specified under the Bankruptcy Act of Thailand, the Court shall issue an absolute receivership order or the order specifying that all assets of the debtor will be controlled and managed by the government officer called “the receiver”. Otherwise, the Court has to dismiss the bankruptcy case.

When the Court issues an absolute receivership order, the debtor shall deliver all property, seals, account books, and documents related to his property and business which are in his/her possession to the receiver. In the light of this order, the debtor shall not perform any act with respect to his property or business. Additionally, all creditors must file a motion or an application to the receiver within 2 months after the order is announced, to receive the repayment of a debt owed by such debtor.

Summary

Many matters specified under the Act have to be considered and handled when a bankruptcy case is incurred such as the ratio of repayment shall be remedied to a creditor in respective level, management of the debtor’s obligations by the receiver. With reference to our experiences in representing our clients at the Thai Bankruptcy Court both creditors and debtors, the written documents are one of the significant keys to reaching a clients’ goal. Therefore, it would be better in case we can assist a client since the pre-trial session of the court proceedings.