Reviewed by ThaiLawOnline, a licensed Thai law firm practising in Thailand since 2006. Thai lawyer of record: Wichuda Atthamethakon, LL.M., Thai Bar Licence 3149/2556.
Last updated on September 5, 2026
Bankruptcy (ล้มละลาย, lom lalai, the court process is kadi lom lalai) is the collective procedure under the Bankruptcy Act B.E. 2483 (1940) by which an insolvent debtor’s property is placed under an official receiver and distributed among all creditors, after which the debtor may be discharged from the remaining debts. It is started by a creditor, not by the debtor, in the Central Bankruptcy Court, and applies to individuals as well as companies. A foreigner meets it as a creditor of a failed Thai counterparty or as a debtor pursued in Thailand.
Table of Contents
How a bankruptcy case works under the Act
Petition. A creditor may petition when the debtor is insolvent and owes a definite sum of not less than 1,000,000 baht (an individual) or 2,000,000 baht (a juristic person). The Act presumes insolvency from listed facts, such as leaving Thailand to avoid creditors, transferring property to defeat them, or failing to satisfy a judgment. A foreigner can be made bankrupt in Thailand if domiciled here or carrying on business here within the year before the petition.
Receivership and adjudication. If the petition is proved the court makes an absolute receivership order: the official receiver of the Legal Execution Department takes control of all the debtor’s property and only the receiver may deal with it or sue on it. Creditors file proofs of debt within the period set, a meeting of creditors decides whether to accept a composition (a settlement paying part of the debts) and, if none is accepted, the court adjudges the debtor bankrupt. A bankrupt individual is discharged automatically 3 years after adjudication in the ordinary case, longer for repeat or fraudulent debtors.
What bankruptcy means for a foreigner in Thailand
As creditor. A bankruptcy petition is a strong collection tool against a debtor with assets, because the receiver can unwind transfers made to defeat creditors. It is also slow, and unsecured creditors share pro rata behind secured creditors and preferred claims such as taxes and wages. A creditor owed less than the threshold, or owed an undetermined sum, must sue in the civil court first and enforce the judgment through the ordinary execution process.
As debtor. A bankrupt cannot manage property, must hand over assets and income above living expenses, needs the receiver’s permission to leave the country, cannot be a company director and cannot be appointed estate administrator. A bankruptcy order abroad has no automatic effect in Thailand, which has no cross-border insolvency law: a foreign trustee wanting Thai assets must start proceedings here. A Thai company’s bankruptcy does not reach its foreign director’s personal assets unless the director gave a personal guarantee.
Bankruptcy, reorganisation and civil execution compared
| Procedure | Who uses it | Threshold and outcome |
|---|---|---|
| Bankruptcy | Creditor of an insolvent individual or company | 1,000,000 baht (individual) or 2,000,000 baht (company); receivership, distribution, discharge |
| Business reorganisation | Debtor company or creditor, in the Central Bankruptcy Court | Debts of at least 10,000,000 baht; plan administrator, automatic stay, rehabilitation plan |
| Civil judgment and execution | Any creditor with a proved claim | No minimum; seizure and auction of specific assets by the Legal Execution Department |
Reorganisation keeps a viable company alive under a court-supervised plan and freezes individual enforcement. Bankruptcy ends the company: a bankrupt company limited is dissolved and its liquidation passes to the receiver. Personal guarantees survive all three, so a foreign shareholder who guaranteed the company’s loan remains liable after the company’s bankruptcy.
Frequently asked questions
Can a foreigner be declared bankrupt in Thailand?
Yes, if the foreigner is domiciled in Thailand or carried on business here within the year before the petition, is insolvent and owes at least 1,000,000 baht. The order affects only assets and conduct within Thailand’s reach, and it is not automatically recognised abroad, just as a foreign bankruptcy is not recognised in Thailand.
How long does bankruptcy last in Thailand?
An individual is discharged automatically 3 years after being adjudged bankrupt in the ordinary case, extended to 5 years for a previous bankrupt and to 10 years where the bankruptcy involved fraud or the debtor obstructed the receiver. Some debts, such as taxes and fines, survive discharge.
What is the minimum debt for a bankruptcy petition in Thailand?
The debtor must owe at least 1,000,000 baht if an individual or 2,000,000 baht if a company or other juristic person, the debt must be a definite sum, and the debtor must be insolvent. Several creditors may combine their claims to reach the threshold.
See also: Dissolution and liquidation, Suretyship and guarantee, Prescription, Courts of first instance, debt collection in Thailand and personal guarantees and guarantor liability.
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