Debt, loans and getting paid

Lending money in Thailand — or trying to collect it — runs into specific statutory rules that many people learn about only after the money is gone.

Lending money: the ground rules

• Loans over a modest threshold need written evidence signed by the borrower to be enforceable in court. A transfer slip alone makes life hard; a signed loan agreement makes it easy.
• Interest on private loans is capped at 15% per year under the Civil and Commercial Code. Charge more without being a licensed lender and the interest clause is void — and unlicensed high-interest lending is a criminal offence.
• Licensed banks, credit cards and regulated personal-loan companies operate under separate Bank of Thailand ceilings.
• The Debt Collection Act bans harassment: collectors face limits on contact hours, disclosure to third parties, and threatening conduct.

Suing over a debt

1. A demand letter from a lawyer often gets results by itself — it signals you are organised enough to sue.
2. Debt claims are filed like any civil case (see procedure); many end in court-mediated instalment settlements.
3. Watch prescription (limitation) periods: they vary by claim type — some trade debts prescribe in as little as 2 years, ordinary loan claims last considerably longer. Take advice early rather than sitting on a claim.

Enforcing a judgment

A judgment is enforced through the Legal Execution Department: seizure and auction of the debtor’s assets, garnishment of bank accounts and salary above protected amounts, and — for insolvent debtors above statutory thresholds — bankruptcy proceedings. Judgments are enforceable for years, but a debtor with no traceable assets still pays nothing: assess collectability before you spend on litigation.

If you are the debtor

• Ignoring service leads to default judgment — engage, and use court mediation to negotiate instalments.
• Debt collectors breaking the Debt Collection Act can be reported.
• Genuine inability to pay is a negotiation position, not a crime; hiding assets after judgment, however, can be.