Legal options in Thailand when a debtor can’t (or won’t) pay

COVID-19 and the resulting containment measures to limit outbreaks in Thailand have caused significant financial hardship for many economic operators, large and small. Whether a company is a creditor or a debtor, it is highly likely that it has been or will be faced with a default caused by the pandemic. This article identifies three legal options available when a party defaults – civil cases, bankruptcy actions and corporate recovery actions – and compares the key elements associated with each option. For context, these three options are defined as follows:

  • Civil case. A legal proceeding in which a creditor brings a civil suit (or demand for arbitration) against a debtor for debt collection. If a debtor fails to pay a debt in accordance with a judgment, the creditor may ask the court to enforce the judgment by seizing and selling the debtor’s property at public auction.
  • Bankruptcy action. A legal proceeding under the Bankruptcy Act in which a government authority may recover a debtor’s assets, sell the assets at public auction, and distribute the net proceeds among creditors. In bankruptcy proceedings, creditors will receive reimbursement proportional to the size of the outstanding debts.
  • Business recovery action. A legal proceeding under the Bankruptcy Act to help a debtor recover from insolvency and continue in business. Debtors benefit from debt relief and a “fresh start” through the turnaround of their business, while creditors are able to recover a higher percentage of the outstanding debt in turnaround than they would not in the event of bankruptcy.

In short, a civil case is a legal claim for repayment of a specific debt, a bankruptcy action results in a distribution of the debtor’s assets among creditors, and a business reorganization action aims to allow the debtor to remain in activity while repaying its debts. in a certain way.

A civil action may be appropriate when the debtor does not repay his debt and is liable only to the creditor who brings the action. Bankruptcy action should be considered when the debtor’s liabilities exceed his assets and his business cannot continue. Business rehabilitation can be a good option when there is still a reasonable chance to reform and rebuild the debtor’s business. The three options also differ in several other ways, as shown below.

Legal Notice

Requirements to launch an action


Advantages and disadvantages


An essential step in pursuing any of these actions is to retain the services of an experienced local attorney who can offer personalized advice. Creditors should determine which of these three legal actions in Thailand best suits their needs and circumstances, and work their way through with the help of their legal advisor in Thailand. As noted above, civil action may be the right option for a single creditor wishing to repay, while bankruptcy and corporate recovery actions are broader options that may be appropriate where serious financial or underlying structural effects affect the debtor. With the help of a specialist in debt collection, bankruptcy and business rehabilitation in Thailand, the creditor can examine the specific circumstances, define and execute a winning strategy and solve their debt collection problems effectively. and profitable.