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Bankruptcy

Bankruptcy

The causes of a bankruptcy petition against a debtor are in section 7 which comprises of three causes.

The causes of a bankruptcy petition against a debtor

The causes of a bankruptcy petition against a debtor are in section 7 which comprises of three causes as follows:

  1. The debtor is insolvent;
  2. The debtor has been domiciled within the Kingdom; or
  3. The debtor has carried out business within the Kingdom, whether personally or through representation.

The requirements of a bankruptcy petition against a debtor

The requirements of a bankruptcy petition against a debtor are in sections 9 and 10. Such requirements can be divided in accordance with the two types of creditors namely: 1.Unsecured creditor and 2. Secured creditor.

  1. Unsecured creditor
    The requirements of a bankruptcy petition against a debtor for an unsecured creditor are in section 9. The unsecured creditor may initiate a bankruptcy action against the debtor only if:
    1. The debtor becomes insolvent;
    2. The debtor who is a natural person is indebted to one or more plaintiff creditors in an amount of not less than one million baht or the debtor who is a juristic person is indebted to one or more plaintiff creditors in an amount of not less than two million Baht; and
    3. The definite amount of such debt is determinable, whether it becomes due forthwith or at a future date.
  2. Secured creditor
    The requirements of a bankruptcy petition against a debtor for a secured creditor are in section 10, which is subject to section 9. The secured creditor may initiate a bankruptcy action against the debtor only if:
    1. The secured creditor is not prohibited from enforcing payment of the debt against the debtor’s property in excess of the property given as security;
    2. The secured creditor makes a statement in the plaint that he shall, upon bankruptcy of the debtor, waive the security for the benefit of all creditors or makes an assessment of the security in the plain and, after deduction of the amount of the debt therefrom, the deficit amounts to not less than one million Baht in case of the debtor who is a natural person or amounts to not less than two million Baht in case of the debtor who is a juristic person.

The requirements of the release of a debtor from bankruptcy

  1. Pre-bankruptcy composition in satisfaction of debts
  2. Post-bankruptcy composition in satisfaction of debts

The requirements of the request for payment of debt in a bankruptcy case

Upon the court’s absolute receivership order against the debtor, a creditor may request for payment of debt only in accordance with the procedures provided in section 27 of the Bankruptcy Act. In this regard, the creditor, whether a plaintiff creditor or not, must submit an application therefor to the receiver within two months as from the date of the publication of the absolute receivership order. But, if the creditor is outside the Kingdom, the receiver may grant an extension of time for a period not exceeding two months in accordance with section 91. The debtor may request for the extension of time in accordance with section 23 of the Civil Procedure Code.

Moreover, according to section 91/1, if the creditor does not request for payment of debt within the period prescribed in section 91, paragraph 1 as stated above, the creditor shall file a petition to the court requesting for the payment of debt together with a force majeure supporting such failure. If it is seen by the court that there it is the case of force majeure with a reasonable ground for the request for payment of debt of the creditor, the court shall make an order granting the creditor to file a petition for the payment of debt to the receiver within the period prescribed by the court.

The creditor who has filed a petition for the payment of debt in accordance with the previous paragraph is entitled to receive payment from the debtor’s estate, but only properties remain after the distribution of properties prior to the petition for payment of debt. Noted that this has no effect on any action carried out by the court, the receiver, or the meeting of creditors.

The petition for the payment of debt of a foreign creditor

In accordance with section 178, a foreign creditor domiciled outside the Kingdom may apply for repayment of debt in a bankruptcy action only when the following conditions are satisfied:

  1. He must prove that creditors in Thailand are similarly entitled to apply for payment of debt in a bankruptcy action under the law and in the court of his country;
  2. He must make a declaration as to whether, and to what extent, he has received or is entitled to receive property or share in the property of the same debtor outside the Kingdom and a declaration that, if any, he must agree to deliver the property or the share in the property of such debtor to be added as part of the debtor’s estate within the Kingdom.

The word “foreign creditor” means a foreigner, whether a natural person or a juristic person, who applies for repayment of debt, shall comply with the requirements under section 178 irrespective to where the cause of action has arisen.

Role of MVP

We can advise on laws in relation to bankruptcy, and represent you in the proceeding of filling a bankruptcy request to its completion.