Debt Collection
Debt Collection means to recover the debt from the person who has failed to pay the money, legal duty assigned in the contract. In Thai Land, most businesses start with signing a contract, accepting duties of each other so if any contracting party refuses to make payment the injured party has the right of debt collection. For example, a contract buyer purchases the goods. The buyer in a contract has to make the payment every 5th of the month but the buyer refuses to pay on a decided date or delay it without any logical delay reason. The seller faced the damages, now he has the legal right under Thai laws to recover the damages and debt collection from the accused.
According to the Thai local legislation, the debtor is legally bound to pay the debt within 30 days after signing the contract. The payment can be delayed up to 20 days due to any logical and acceptable reason before the court but the debtor has to pay 15% of the value of the contract. In the case the contracting parties have not decided the interest rate in the contract then the debtor will pay 7.5% of the transaction value.
The procedure of Debt Collection:
In Thai Land, the creditor can adopt two procedures for collecting a debt;
1. Amicable Procedure
2. Court Procedure
civil litigation
Court Procedure:
The parties have the option of Pre-trial debt collection before filing the suit in the court. In Pre-trial debt collection, the parties have the option to sort out the matter through mediation or negotiation by sitting with each other. The creditor will send the demand letter to the debtor. The letter will include every piece of information i.e. cause of action, injury, etc. If the debtor doesn’t respond within the given time then the victim has the legal right to collect the debt through a court procedure. The recovery of the debt in court procedure can depend on the following circumstances;
1. The claimant should record the statement of the witness regarding the authenticity and validity of the contract before the court in the case, loan is a maximum of 2,000 baths.
2. If the recovered amount is more than 2,000 baht then the claimant must provide the original admissible documents i.e. Original written contract between the parties.
3. The court can also recover the debt in the foreign currency according to the current exchange rate.
4. The court can also order to pay the pecuniary debt in goods or property if the creditor agrees on it.
Amicable Procedure:
Amicable Procedure is the prominent and effective procedure to collect the debt. It takes very little time and is also very inexpensive, both parties are not bound in any law. They can agree on their decided terms. The amicable procedure is as follow;
1. The claimant or creditor will appoint a mediator (law firm specialized). He should have knowledge about the debt collection and be aware of the relevant laws.
2. He will contact the debtor on the phone and try to make a settlement within the parties.
3. If the debtor agrees to pay the debt then the parties can sign a new contract and can decide the terms of the contract. In the new contract, the debtor can pay the debt in installment without any interest.
4. If the debtor doesn’t agree to pay the debt then the creditor can file the claim in court against the debtor.
If you want to file the claim of debt collection in court then it is important to hire an attorney. The case of debt collection is very sensitive and based on several relevant elements. An ordinary person who does not know much about the law cannot proceed with the case in court. An attorney will help you to draft the documents, submissive of the case in the court, collection of facts, evidence, and witness, and most importantly he will professionally and legally proceed with your case in the court to recover the debt and other damages.
The procedure of Thai Courts:
When the claimant will file the suit of debt collection in the court, the court will send the notice to the defendant to submit the answer within the given time mentioned in the notice. The court will also order the claimant to submit the evidence, witnesses, contract, etc. The court will consider the facts provided by both parties, statement of witnesses, evidence, and then give the judgment.
Thai laws also protect foreign companies working in Thailand or with Thai companies. They can file the suit in the Thai court of debt collection but they have to consider the legislation of Thailand. The laws of Thailand will apply in the debt collection cases. Similarly, the Thai companies can also file the suit of debt collection against the foreign companies but in the company’s home country and according to the laws of the country. The Thai laws will not have any influence on it.