Debt Collection Limitations Regarding Collateral Asset Claims
On November 2540, Chiang Mai executed a loan agreement with Mr. Jam at Mr. Jata’s house in Supannburi Province, with an interest rate of 10 percent per annum for a period of one year, with land held by Mr. Jaeng designated as collateral and not paid. Mr. Jam subsequently issued a letter demanding payment to Mr. Jaeng, which occurred fifteen days after the initial letter, but Mr. Jaeng failed to pay. Consequently, Mr. Jam intended to file a lawsuit against Mr. Jaeng for bankruptcy and to file a lawsuit with the Supannburi Provincial Court. The question is whether Mr. Jam can file such a lawsuit, and if so, why not. The answer is that Mr. Jam cannot file a lawsuit against Mr. Jaeng for bankruptcy, even though the total amount, including interest, exceeded 50,000 Baht. It is presumed that Mr. Jaeng has substantial debts due to the two demand letters occurring at least thirty days apart. However, Mr. Jam issued two demand letters to Mr. Jaeng. (The Bankruptcy Act, Section 8(9) and Section 9). There was no special agreement that when commencing enforcement of debt from assets that were pledged, the amount would be no less than 50,000 Baht.
When Mr. Jaeng paid the debt, he remained liable for the outstanding portion thereof (The Bankruptcy Act, Section ). There was no fact that when Mr. Jaeng was declared bankrupt, Mr. Jam would agree to benefit creditors or to value the collateral which, after deducting the deficiency, would still be no less than 50,000 Baht (The Bankruptcy Act, Section 1).
Mr. Jam cannot file a lawsuit against Mr. Jaeng at the Supannburi Provincial Court because the Supannburi Provincial Court is not the court where Mr. Jaeng’s domicile is located or where he conducts business at the time Mr. Jam intends to file suit or within one year prior to that time (The Bankruptcy Act, Section 151).
On October 15, 2541, Mr. Somchai overdrawn his account according to the contract.