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Financial rehabilitation for natural person debtors in Thailand: a new approach under bankruptcy law |
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| รหัสดีโอไอ | |
| Title | Financial rehabilitation for natural person debtors in Thailand: a new approach under bankruptcy law |
| Creator | Saya Ponsan |
| Contributor | Munin Pongsapan, Advisor |
| Publisher | Thammasat University |
| Publication Year | 2568 |
| Keyword | Financial rehabilitation proceedings, Rehabilitation proceedings, Bankruptcy law, Natural person debtors, Chapter 3/4, the Draft Bankruptcy Act (No. …) B.E. … |
| Abstract | Thailand is facing a serious household debt problem. The level of household debt remains high, and many natural person debtors are unable to repay their debts. The problem is not only shown by the total amount of debt, but also by the increasing number of debtors with non-performing loans, especially small debtors whose debts are not high in amount. Although some debtors may have debts of not more than 100,000 Baht or only hundreds of thousands of Baht, such debts may already be serious for low-income debtors or debtors who have unstable income. Some debtors may have debts below the bankruptcy threshold, while negative credit information may make access to new formal credit more difficult and reduce the debtor's ability to generate income for repayment to creditors. Therefore, the household debt problem is not only an economic problem, but also a legal problem that requires a suitable legal mechanism.Under the current Bankruptcy Act B.E. 2483, the natural person debtors still have limited options when they face financial difficulties. The juristic person debtors may enter into business reorganization proceedings and negotiate with all creditors through a legal process. However, the natural person debtors do not have the same right. When the natural person debtor becomes insolvent and is indebted not less than 1 million Baht, they have to wait for a creditor to file a bankruptcy case first. This shows that the current bankruptcy law does not allow the natural person debtors to initiate financial rehabilitation proceedings by themselves. This study therefore examines the principles of bankruptcy law, business reorganization law, and financial rehabilitation for natural person debtors.In response to these problems, this study proposes that financial rehabilitation proceedings for natural person debtors should be added to the current Bankruptcy Act B.E. 2483 as Chapter 3/4. The Draft Bankruptcy Act attempts to solve the problem by allowing natural person debtors who have income and definite debts of not less than 100,000 Baht but not more than 1,000,000 Baht to file a petition for financial rehabilitation with the court. Chapter 3/4 would provide the main legal framework for financial rehabilitation proceedings, including the filing and approval of rehabilitation, the debtor’s rehabilitation plan, the application for repayment of debt, the consideration and approval of the plan, the step after the court approves the plan, and the penalties relating to the proceedings. These financial rehabilitation proceedings would allow debtors to negotiate with all creditors at the same time, propose a repayment plan, and avoid entering into bankruptcy proceedings unnecessarily. They may also help reduce unnecessary court proceedings because creditors do not need to separately file civil cases, enforce debt payment, or file bankruptcy cases against the debtor. Therefore, the enactment of Chapter 3/4 on financial rehabilitation proceedings for the natural person debtors would help fill the gap in the Bankruptcy Act and make Thai bankruptcy law more suitable for the current household debt situation. |
