LOANS

[richard]

A friend of mine lent money to a friends company and had a legal agreement drawn up. He has been repaid the sum lent but not the accrued interest which goes back 8 years. The interest accrued is higher than the original amount lent. We are not talking big numbers (400k)

1) What chances with a local lawyer?
2) Anybody any experience of this?

My friend wouldn't post as he hates computers

All sensible replies welcome

Edit. The agreement is a letter from the MD of the company on company headed paper

[blue05]

would it be considered a legal document? from that I mean is it a least a heads of agreement. is it in Thai and English? was it signed by both parties and has both signatures been witnessed at the time?

[richard]

From what I know it's in English and was not witnessed

[blue05]

without taking advice I would imagine that would be a hard one to get through thai courts- though it may be worth consulting a lawyer as the ones that owes the cash may just buckle

[SunandFun]

What is the reason they have refused to pay? Or have they just stopped communicating. When was the last payment received to close out the Principle amount owed? What has been communicated regarding further payments? Arbitration is probably the best route providing you can get the two to talk. If he loaned him 400,000 Baht, there should have been a solid friendship or relationship. Has that stopped? Many questions, but to follow the legl route may be costly and not yield positive results. Lesson learned? NEVER LOAN MONEY TO ANY FRIENDS OR FAMILY.

[lomuamart]

If not witnessed then there could be trouble.

[Pedro C]

Smells like a dead fish.
Lesson: NEVER loan money out to friends or family (other than petty cash you can do without anyway). ALWAYS have an attorney draw up loan documents if lending money you cannot afford to lose. The attorney should have the loan document notified and the signatures witnessed.

Old Chinese Proverb; "You want credit - I refuse - you angry. I give credit - you not pay - I angry. Better you angry."

[margaretcarnes]

If not witnessed then there could be trouble.

You're right Lomu. And the agreement should also have contained clear detail of any accrued interest to be repaid as well.
I'd say almost defintiely not worth persuing. In the UK where we can resort to the small claims courts they might say that any agreement on interest repayments could have been implied. Unfortunately in the LOS where there is a culture of 'loans' often being treated as gifts I think I would just be glad that I'd got the capital sum back.

[advocate]

Most legal documents do not require the signatures be witnessed. The major exception being wills and codicils.

If it came down to a trial, the other party will usually admit that they signed the document, otherwise expert testimony is usually accepted as proof that the signature is genuine. If a party gets caught lying to the court by denying it is their signature, they will loose all credibility, and hence the case, and can also be charged with perjury. Perjury is a criminal charge rather than a civil matter and most lawyers will advise their client not to risk lying to the court.

The legal fees to pursue this would likely surpass the amount of the interest owed and the case would likely drag on for years. The Thai courts don't issue summary judgements for non appearance of defendants until at least the 3rd or 4rth non appearance, and Thai lawyers know this. They will advise their client not to bother filing a defence or even showing up for court, until summonsed at least 3 times. In the meantime, the plaintiff is paying for their lawyer for about 1 year before they can even get the defendant into a courtroom.

Even if successfull in obtaining a judgement, enforcing the judgement and collecting the money is another matter. If it is against a falang, it is likely that any assets are held by nominess. If the judgement is against a Thai, there is the very real possibility they will see it as cheaper to have you disposed of then to pay the debt.

Regardless, there is not enough detail here to assess the reasonable likelihood of successfully enforcing the contract.

[barrys]

It could also turn out that the agreement is unenforceable as there are strict legal rules here about who can grant loans and charge interest!

[Super Joe]

Here, I believe, is the wellivent section from the Thai Civil & Commercial Codes if it helps any. It's an unofficial translation so, you know...

TITLE IX - LOAN
CHAPTER II
LOAN FOR CONSUMPTION
.
- Section 650. A loan for consumption is a contract whereby the lender transfers to the borrower the ownership of a certain quantity of property which is consumed in the user, and the borrower agrees to return a property of the same kind, quality and quantity.
.
- Section 651. Costs of the contract, costs of delivery of the property lent and costs of return are borne by the borrower.
.
- Section 652. If no time for return of the property lent has been fixed, the lender may give notice to the borrower to return the property within a reasonable time to be fixed in the notice.
.
- Section 653. A loan of money for a sum is not enforceable by action unless there be some written evidence of the loan signed by the borrower. No repayment of a loan of money evidenced by written agreement may be proved unless there be some written evidence signed by the lender, or the document evidencing the loan has been surrendered to the borrower, or cancelled.
.
- Section 654. Interest shall not exceed 15% per year; when a higher rate of interest is fixed by the contract, it shall be reduced to 15% per year.
.
- Section 655. Interest shall not bear interest. The parties to a loan of money may, however, agree that the interest due for not less than one year shall be added to the capital, and that the whole shall bear interest, but such agreement must be made in writing.
.
- Section 656. If a loan is made for a sum of money, and the lender accepts goods or other property for the repayment of the loan, the amount of the debt extinguished thereby shall be considered as equal to the market value of the goods or property at the time and place of delivery. Any agreement to the contrary is void.

I wouldn't even bother entertaining legal action, unless maybe if it was a serious amount... against someone who has the means to pay... and who isn't a Thai national. The ease and seemingly triviality at which they consider taking matters into their own hands is all rather scary, and certainly something 99% of us are not programmed to compete with

SJ

[richard]

I've been advised to tell my friend to sell the loans to a Chinese money collection agency

[Lung Per]

I've been advised to tell my friend to sell the loans to a Chinese money collection agency

You could also sell you claim to the local chapter of HA. They are excellent collection agents. You may not get your money but then you will get a couple of dead fingers previously located on the hand of your debtor.....