Navigating Bankruptcy and Insolvency in Thailand

Understanding Collective Legal Action

Under the Thai Bankruptcy Act B.E. 2483 (1940), a debtor may be declared bankrupt when they are unable to meet their financial obligations. Creditors can petition the Bankruptcy Court if:

An individual owes at least 1 million THB, or
A corporate entity owes at least 2 million THB.

Eligible parties to file a bankruptcy petition include:

Secured and unsecured creditors
Company auditors
Thai asset management firms

During the proceedings, the Court evaluates whether the debtor is genuinely insolvent. If confirmed, the Court issues an Absolute Receivership Order (ARO), placing the debtor’s assets under the control of an appointed Receiver. Until this order is issued, the petition may be dismissed. Once the ARO is in effect, the debtor must hand over all property, company seals, records, and business-related documents to the Receiver. Creditors have two months to file claims to recover debts.

Our service include:

Bankruptcy assessment and strategic planning
Creditor and debtor representation
Receivership and claim filing support
Corporate restructuring and rehabilitation
Liquidation guidance and asset management
Bankruptcy Court litigation and appeals

Personal Bankruptcy Proceedings

In Thailand, personal bankruptcy can only be initiated by a creditor; voluntary filing is not permitted. Insolvency is generally determined when debts surpass assets. Courts require creditors to establish a presumption of insolvency, after which the burden may shift to the debtor if disputed.

Key procedural steps include:

Scheduling a preliminary hearing to consider objections
Issuance of a receivership order to secure and manage assets
Opportunity for the debtor to submit a composition proposal detailing debt repayment, business operations, and security arrangements
Creditors can approve the proposal with a 75% majority; rejection leads to formal bankruptcy and liquidation

Release from personal bankruptcy may occur if:

The Receiver cannot recover additional assets
The debtor has no prior bankruptcy record
All debts are fully repaid
A period of ten years passes without recoverable assets

Typically, discharged bankrupt individuals are released three years after the declaration, unless dishonesty is involved.

Corporate Insolvency and Restructuring

For corporate debtors, Thai law provides three main avenues:

Creditor-initiated bankruptcy – Court verifies insolvency and supervises asset distribution
Voluntary liquidation – Initiated by shareholders when liabilities exceed assets, requiring fully paid-up shares
Business reorganization – Either debtors or creditors may seek court-approved restructuring to rehabilitate the company

During restructuring, a plan administrator is appointed to oversee operations. Parties are restricted from:

Commencing liquidation or litigation against the company
Halting operations or revoking licenses
Filing new bankruptcy or civil claims for existing debts
Enforcing security without court approval
Undertaking activities that could compromise assets

Creditors must submit claims within one month of public notice. Approved reorganization plans typically allow five years for execution, with extensions possible. The Official Receiver monitors compliance and can replace administrators if necessary.

Our Services

BASE Law Firm provides specialized guidance on both personal and corporate bankruptcy matters in Thailand. Our expertise covers:

Strategic advice for managing debtor obligations
Representation in all stages of bankruptcy proceedings before the Bankruptcy Court
Equitable repayment planning for creditors
Assistance with corporate restructuring and asset management

We help businesses and individuals navigate insolvency with careful planning, meticulous documentation, and effective legal advocacy. Our goal is to deliver clear, practical solutions that protect client interests and maximize outcomes.

Contact Base Law Firm to discuss bankruptcy strategies and ensure compliance with Thai insolvency law.