Debt Collection in Thailand
Updated on Monday 20th March 2017
Rate this article 4 reviewsbased on
Businesses in Thailand are established under a contract, that in some cases may not be respected by a party with which a company has signed a deal. As such, the company will have to proceed to collect its debts through various methods, in accordance with the local legislation, but also based on how the debtor will respond to the claims. Foreign investors or local businessmen who are involved in a debt collection situation can address their case to our team of Thai lawyers, who can offer assistance on the methods which can be applied in this situation.
Payments in Thailand
According to the local legislation, the payments incurred by a debtor in Thailand are to be paid within a period of 30 days since the contract became effective. The commercial law states that a payment can be delayed up to 20 days, but the debtor will have to pay interest on late payments, which can account for up to 15% of the value of the contract. In the situation in which the contract does not stipulate a fixed interest rate, the contract will be charged with a rate of 7.5% of the transaction value.
Recover a debt in Thailand
Thai commercial law stipulates that a debt has to be collected in a period of maximum 2 years. In order to do so, the company interested in recovering a debt should provide the full documentation on the case, to attest the fact that debtor hasn’t paid his or her debts. Our lawyers in Thailand will require the written and e-mail correspondence kept between the parties, but also financial documents, such as purchase orders or invoices.
We invite you to watch a comprehensive video about the debt collection procedure in Thailand:
Phases of debt collection in Thailand
The process of recovering a debt is comprised of the following phases:
• pre-trial debt collection;
• debt collection involving a Thai court.
The first phase refers to the procedure followed by the company which has to collect a debt; the procedure refers to the direct communication between the two parties. A representative of the company will send a demand letter to the debtor, requiring him to pay the value of the contract.
If this method fails, the case will be addressed to a Thai court, which is usually held in the Court of Justice. The creditor will file a claim, which will be sent to the debtor. Our team of lawyers can also represent clients involved in various litigation cases.
If you need further information on debt collection in Thailand, please contact our team of lawyers, who can provide you with assistance or legal representation in front of a Thai court.