Debt Collection in Thailand: Getting Your Money Back
Call the Attorney at +66 26112881 
Free Consultation
Recovering an unpaid debt in Thailand is often a tricky task that can be made more distasteful when the debtor, whether it is Thai or a foreigner, refuses to settle even after numerous attempts. Many expatriates and even companies, who do business in Thailand, have run into difficulties with debt recovery.
While the best initial action is to negotiate a friendly agreement to settle outstanding accounts, it is sometimes a sad reality that getting your money back requires drawing a firm line with debtors who dodge payments or try to reduce amounts even after payment conditions have already been agreed upon.
When you have exhausted all attempts to collect in a reasonable manner, what is now your next course of action to recover a debt while in Thailand?
Thailand Laws Related to Debt Recovery
First, you need to determine what counts as evidence to determine whether or not a contract of loan for money can be enforced in Thailand’s courts. There are two different types of evidence depending on the amount borrowed:
• For a loan of 2,000 baht or less, the only evidence required is that a witness give testimony that a contract was made.
• For loans that exceed 2,000 baht, any contract should be expressed in writing. When attempting to collect a debt for said amount of money, the best piece of evidence is a document for the loan itself with the borrower’s signature.
Other things to note about debt collection in Thailand are:
• No compound interest can be enforced; which means that generally no interest can be accrued from existing interest. There are exceptions, however, (commercial transactions, etc.) that you will learn about upon speaking to a debt recovery lawyer.
• If a loan has been made but no particular interest was specified, the Thai court will arrange a prescribed rate of 7.5% per annum.
• Payment of debts made out in foreign currency can be expressed in Thai currency using the current exchange rate.
• A debt in the form of money can be recovered if the borrower will pay via property or goods and the creditor will accept. Market value will be determined for the amount of goods for loan payment on the date of delivery.
What are Your Next Steps towards Collecting a Debt?
Recovering a debt in Thailand (and in any part of the world, really) may not be quick or easy, but there’s always a way. There are generally 3 steps towards completing debt collection: (1) What you should do before litigation, (2) what to do during litigation and, if the outcome was to your advantage, (3) what you should do to enforce the judgment of the Thai court.
Step (1) happens when no agreement can be reached between creditor and debtor, and the debt remains unpaid. It is in this stage that demand letters from your legal representative are delivered to the debtor with the payment period usually fixed from 7-15 days, depending on how much the loan is. The success rate after a demand to pay is fair, and you may already get the full amount of the debt.
If this doesn’t work and your creditor does not comply with the sent demand letters, then you can opt for litigation with the full range of possible options laid out to you by your chosen Thai lawyer who specializes on debt collection.
ABOUT THE AUTHOR: Atty. Prapapan Yodyoy
Atty. Prapapan is a graduate of Ramkhamheng University (LL.B.) and a member of the Law Association of Thailand. She was admitted to the Thai Bar Association (Barrister-at-Law).
Prior to joining GAM Legal Alliance, she had worked with legal advisory firm and international law firm in Bangkok. Her practice areas include family law i.e. marriage, divorce, adoption, parental rights, corporate law i.e. limited companies, Treat of Amity & BOI, labor law, civil & criminal litigation and property law.
Atty. Prapapan is currently the head of our Family Legal Service division at our Bangkok office.
Copyright G.A.M. Legal Alliance
More information about G.A.M. Legal Alliance
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
When you have exhausted all attempts to collect in a reasonable manner, what is now your next course of action to recover a debt while in Thailand?
Thailand Laws Related to Debt Recovery
First, you need to determine what counts as evidence to determine whether or not a contract of loan for money can be enforced in Thailand’s courts. There are two different types of evidence depending on the amount borrowed:
• For a loan of 2,000 baht or less, the only evidence required is that a witness give testimony that a contract was made.
• For loans that exceed 2,000 baht, any contract should be expressed in writing. When attempting to collect a debt for said amount of money, the best piece of evidence is a document for the loan itself with the borrower’s signature.
Other things to note about debt collection in Thailand are:
• No compound interest can be enforced; which means that generally no interest can be accrued from existing interest. There are exceptions, however, (commercial transactions, etc.) that you will learn about upon speaking to a debt recovery lawyer.
• If a loan has been made but no particular interest was specified, the Thai court will arrange a prescribed rate of 7.5% per annum.
• Payment of debts made out in foreign currency can be expressed in Thai currency using the current exchange rate.
• A debt in the form of money can be recovered if the borrower will pay via property or goods and the creditor will accept. Market value will be determined for the amount of goods for loan payment on the date of delivery.
What are Your Next Steps towards Collecting a Debt?
Recovering a debt in Thailand (and in any part of the world, really) may not be quick or easy, but there’s always a way. There are generally 3 steps towards completing debt collection: (1) What you should do before litigation, (2) what to do during litigation and, if the outcome was to your advantage, (3) what you should do to enforce the judgment of the Thai court.
Step (1) happens when no agreement can be reached between creditor and debtor, and the debt remains unpaid. It is in this stage that demand letters from your legal representative are delivered to the debtor with the payment period usually fixed from 7-15 days, depending on how much the loan is. The success rate after a demand to pay is fair, and you may already get the full amount of the debt.
If this doesn’t work and your creditor does not comply with the sent demand letters, then you can opt for litigation with the full range of possible options laid out to you by your chosen Thai lawyer who specializes on debt collection.
ABOUT THE AUTHOR: Atty. Prapapan Yodyoy
Atty. Prapapan is a graduate of Ramkhamheng University (LL.B.) and a member of the Law Association of Thailand. She was admitted to the Thai Bar Association (Barrister-at-Law).
Prior to joining GAM Legal Alliance, she had worked with legal advisory firm and international law firm in Bangkok. Her practice areas include family law i.e. marriage, divorce, adoption, parental rights, corporate law i.e. limited companies, Treat of Amity & BOI, labor law, civil & criminal litigation and property law.
Atty. Prapapan is currently the head of our Family Legal Service division at our Bangkok office.
Copyright G.A.M. Legal Alliance
More information about G.A.M. Legal Alliance
View all articles published by G.A.M. Legal Alliance
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
