Debt Collection & Repossession

Debt Collection & Repossession: Legal Aspects

When the Court renders a decision on who shall lose a case or has to pay debts or perform some measure, if there is no further appeal or petition to the Supreme Court, such party losing the case shall be the “judgment debtor” (JD). They must abide by the decision of the Court. Otherwise, the party who won the case can ask the Court to enforce the judgment as per the court order. This process is generally known as the “legal execution” process.

The legal execution under the Civil Procedure Law of Thailand, Section 274, which stipulates:

“If a person has become a surety (judgment debtor) in Court by way of a bond or otherwise for the performance of an obligation under a judgment or order or any part thereof, such judgment or order may be used to enforce the execution of the guarantee without having to institute a case against the surety (judgment debtor).” 

In relation to legal execution, if the JD does not comply with the decree or an order of the Court issued in accordance with the judgment, the judgment creditor (JC) (the party who won the case) shall be entitled to request execution by means of seizure of property, attachment of claims or other execution measures.

In accordance with the Civil Procedure Law of Thailand, Section 275, the judgment creditor may file to the Court an ex parte (one-sided) application for a writ of execution. The application shall expressly mention:

  • the judgment or order under which execution is applied for;
  • the extent to which such judgment or order has remained unsatisfied;
  • the measures of execution for which the writ is applied for.

The legal execution process shall not be enforced with a third party not involved with the case or who is not the JD. In addition, in case of seizure of property, we have to be concerned about the ownership of such property. If such property belongs to another person, the law will protect their right; he or she shall submit the request to release the property from legal execution.

Moreover, the legal execution process must be requested by the judgment creditor within ten years from the date of rendering the final judgment of the Court. Furthermore, if the judgment or order requires the obligation to be performed in installments on a monthly or annual basis, or be performed in the future, such period will be counted from the date on which the performance of obligations under such judgment is enforceable.

In reference to the request from the JC, it shall be declared the obligations have not been performed by the JD yet as well as the method through which they wish the Court to proceed in the legal execution process. Once the Court agrees with such an application, an executing officer shall be appointed by the Court to manage this process. While the Court is considering such a request, the judgment creditor shall have the right to request a measurement to protect their benefits as well.

Debt Collection, Thailand: The New Thai Law

The new debt collection law specifies that the borrower takes responsibility for contract costs, delivery of property costs, and return of property costs. In the case of loans where the loan amount was under 2,000 baht, witness testimony is enough to establish a legal loan. If the amount is more than 2,000 baht, a written contract is required (with signatures from the borrower and other contractual parties).

The highest legal interest rate permitted by law on loans is 15% annually. Higher rates are automatically reduced unless there is a legal reason for a higher rate, such as might be found with some financial institutions.

Legally, only the following circumstances may constitute compound interest rates. Under any other circumstance, the law generally prohibits compound interest.

  • If the loan is deemed to be for commercial use (for example, a bank current account)
  • There is an agreement between both parties that the entire amount bears interest after interest that was due after one year has been added to the overall capital. Both parties, in this case, must be signatories to a legal agreement stating as much.

In cases where goods and services or properties were accepted as repayment, the Court will consider the market value of these goods, etc. If only goods and property were accepted as repayment and no amount of money was repaid the Court would consider the amount of debt paid in precisely the same way. If a contract does not specify an interest rate, but mention is made of interest, then the Thai Court orders a rate of 7.5% annually.

Thailand has an unfortunate reputation when it comes to debt collection, as debt collection in this country tends to be associated with deceptive and unscrupulous practices. It is not uncommon to hear about collectors tricking debtors by adding false information into contracts or resorting to blackmail, violence, abusive language, and in extreme cases, even murder. In response to this, the National Legislative Assembly bought about the Debt Collection Act 2558.

When the Thai government passed the debt collection act, they meant to establish fair debt collection protocols and other standardized collection rules. The debt collection law applies to individual creditors, institutional lenders, and all other debt collectors. How creditors collect debts is now carefully regulated, and debtors are now more protected; even loan sharks are expected to adhere to the new law.

The law defines highly specific roles in this process.

  • Debt collectors are defined as a debt collection agency or a creditor’s attorney or representative.
  • A debt collection business refers to any business hired for the express purpose of collecting a debt, either through indirect methods or directly.
  • Lawyers who collect debts on behalf of clients are not defined as a debt collection business.

A debtor refers to:

  • A natural person obligated to pay a debt
  • This includes the individual debt guarantor.

We have been reckoned that the problem arising in the legal execution process may be related to the delay of the judgment creditor in proposing the application to conduct the legal execution or method to request the Court to exercise some measure with the judgment debtor’s asset. These must require the attorney in assisting them to finalize the case. We, as one of the litigation law firms, would be pleased to offer and serve you the legal service from the commencement of the case until it is accomplished.

A debt collector is only permitted to communicate with the debtor themselves (individual debtors) or a company or person authorized by the debtor. Third parties may only be approached by a collector in order to ascertain information or find out where the debtor is. Even in this case, the debt collector may not inform the third party that a debt is owed by the debtor. Only a spouse, parent, or child of the individual debtor may be informed that a debt is owed.

All communication from the debt collector to the third party related to debt collection must be strictly confidential. No hint, in any form, can be made that any communication is related to debt collection when trying to establish the debtor’s whereabouts. This includes, but is not limited to, the name of a debt collection agency, how much or even that the debtor owes money, reference to debtor companies or debt recovery, etc. There are also specific times during which the collector is allowed to contact the debtor:

  • Monday to Friday: 8 am to 8 pm
  • Holidays: 8 am to 6 pm

The debtor will also disclose a list of places by which the debt collector may contact the debtor. Any lawyers for debt collectors are obliged to state information about themselves in correspondence:

  • the debt amount
  • names of the creditors
  • agency
  • name of the debt collection lawyer

In cases where a collector seeks to make a debt collection face to face or demands performance, they need to be able to show power of attorney (a debt collection, therefore, cannot be made by just anyone). When the debt collectors contact the debtor, and the debtor pays, the collector must provide the debtor evidence of the payment. In other words, if the debtor pays the debt they must receive a receipt for their payment. This also applies when a business hired to collect does so successfully.

Collectors who attempt to collect a debt may not do the following:

  • Use any insults or profane or other language that may distress the recipient of the message.
  • Disclose to any third party that the debtor owes a debt unless they are directly related to the debtor.
  • Threaten the debtor’s assets, their life, body, or their family, reputation, or property in any way.
  • Use any measure of incorrect or false information for the purpose of deception of the debtor. For example:
    - In any way, falsely claiming to be a state official or have a court order.
    - Falsely threaten seizure of assets in order to collect a debt.
    - Disclosing that the purpose of communication is to collect a debt
  • Cannot contact debtors via fax, letter, postcard, or other non-discreet means that might show that the communication is related to debt recovery or collection.
  • An official limit set for fees and expenses must be adhered to by the debt collector, even when it is a law firm.

Corporate debt collectors, who may be individual directors, managers, and representatives, may be held criminally liable should there be involvement from their side. Even when a juristic person violates the law within the scope of practice of the representative, manager, or director, then they can be liable for the same offence as they are deemed responsible for a juristic person acting under their scope for their purpose.

Remember that a money contract or loan in Thailand is referred to as a loan of consumption and that such a contract is only deemed complete when property has been delivered. A debtor should always make use of reputable lenders to ensure that the Debt Collection Act will be respected.

In Closing

The Committee Governing Debt Collection is responsible for setting any official limit on fees that can be charged, including fees for legal services charged by a law firm.

Falsely threatening messages for whatever reason, even to ascertain the debtor’s location, may be subject to criminal charges. Under certain circumstances, the collector’s business name may be used in official legal demand letters, providing that the collector’s business does not have a name obviously suggesting a debt owed by the recipient.


We have reckoned that the problem arising in the legal execution process may be related to the delay of the judgment creditor in proposing the application to conduct the legal execution or method to request the Court to exercise some measure with the judgment debtor's asset. These must require the attorney assisting them to finalize the case. We, as one of the litigation law firms in Thailand, would be pleased to offer you the legal service from the commencement of the case until it is completed.