Creditors and Debtors: What You Need to Know! What Assets Can Be Seized or Not? What to Do If You Are Sued?
Let's delve into the laws regarding debtors and creditors. What should you do if you are sued? Which assets cannot be seized? And what can you do if you have no assets at all?
This is a significant issue that has changed the landscape for both debtors and creditors, especially after the announcement of a new law prohibiting the seizure of a debtor's salary if it is below 20,000 Baht, up from the previous threshold of 10,000 Baht. The Department of Enforcement has announced that the new asset seizure law will take effect from September 4, 2017 (read the news about the new law prohibiting the seizure of salaries below 20,000 Baht).
Today, we will explore the details of the new asset seizure law, which is important for everyone, not just debtors or creditors. Nowadays, there are many ways to conduct business or purchase items easily, whether through credit cards or various loans, which can lead to unintentional debt.
What causes assets to be seized or frozen?
Assets can be seized or frozen only when there is a default on debt repayment, and the creditor has successfully sued in a civil court. If the debtor fails to repay the debt within the timeframe set by the court, the court will issue an enforcement order allowing the seizure or freezing of the debtor's assets.
Only officials from the Department of Enforcement are authorized to seize or freeze a debtor's assets. They will then submit a request to the court for permission to auction the seized assets to repay the creditor.
What assets can be seized?
Even if the creditor wins the case, it does not mean they can seize all of the debtor's assets. Let's look at what can be legally seized and what cannot be seized.
Assets that can be seized:
- Valuable items, jewelry, including diamonds, gems, watches, and collectibles with value.
- Houses and land, even if they are mortgaged.
- Cars or motorcycles owned by the debtor that are not used for business purposes.
- Money in bank accounts or dividends from investments.
- Investment assets such as stocks, gold, bonds, or funds.
- Salaries from employment in private companies or state enterprises, but only if the income exceeds 20,000 Baht per month.
Assets that cannot be seized:
- Personal items such as clothing, tables, and chairs with a total value not exceeding 20,000 Baht (if exceeding, they can be seized).
- Tools necessary for the debtor's profession, with a total value not exceeding 100,000 Baht (if exceeding, they can be seized).
- Assets that cannot be transferred by law, such as cars or motorcycles under financing.
- Animals, items, or equipment necessary for assisting the debtor's bodily functions.
- Salaries, wages, pensions, or allowances of civil servants cannot be seized. If a private or state enterprise employee earns less than 20,000 Baht, it also cannot be seized.
- Living allowances.
- Income provided by others for living expenses, but not exceeding 20,000 Baht per month (if exceeding, it can be seized).
- Severance pay or other similar income for non-government employees not exceeding 300,000 Baht (if exceeding, it can be seized).
- Funeral assistance funds.
What can you do if your assets are about to be seized?
If you are sued by a creditor and your assets are about to be seized, there are several options available:
1. Repay the debt
This is the simplest method. Since the problem arises from unpaid debts, it can be resolved by repaying the creditor in full.
2. Fight the case
Fighting the case in court is another option if you have sufficient grounds. The court may negotiate for better terms, and if the debt was incurred unfairly, you can counter-sue the creditor, which may temporarily suspend the enforcement process.
3. Request a debt settlement
Debtors have the right to request a debt settlement with officials if the seized assets have not yet been auctioned.
4. Ensure the seized assets are correct
If the debtor loses the case and the asset seizure process begins, they should verify that the seizure was conducted correctly and that the valuation was not below market value to avoid losing out.
What if the debtor has no assets to seize?
If the enforcement officer has initiated the enforcement process (within 10 years from the judgment date) and the debtor has no assets to seize, the officer cannot proceed with any asset seizure.
However, this does not mean the debtor is free forever. If in the future the debtor acquires assets that can be seized, the enforcement officer can proceed with the seizure immediately, with no expiration until the debtor repays the full amount.
Therefore, before incurring debt, think carefully about whether you can repay it. Because if you are sued, the chances of winning the case are very slim, and getting out of the obligation to repay the debt is not easy either.
For those seeking more details about asset seizure or freezing, you can inquire further at the Department of Enforcement or call 0 2881 4999.
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