✅ What is Bankruptcy?

Bankruptcy is a legal process used to manage the debts of an individual or business that is unable to repay them. Its purpose is to ensure that creditors are repaid in accordance with the law, while also allowing the debtor a chance to start over once the process is completed.

✅ Who Can Be Declared Bankrupt?

• Individuals with debts of 1 million baht or more

• Legal entities (such as companies or partnerships) with debts of 2 million baht or more

Creditors can file a petition with the court requesting that the debtor be declared bankrupt.

✅ Bankruptcy Process

1. The creditor files a bankruptcy petition in court, claiming the debtor is unable to pay their debts.

2. The court holds a hearing and may declare the debtor bankrupt.

3. An official receiver (trustee) is appointed to manage the debtor’s assets.

4. The debtor’s assets are liquidated (sold) and the proceeds distributed to creditors in order of priority.

5. The debtor is discharged from bankruptcy after the period prescribed by law (typically 3 years, unless special conditions apply).

✅ Effects of Bankruptcy

• Assets are seized and sold to repay debts.

• The debtor is restricted from engaging in certain financial activities, such as applying for loans or credit cards.

• Loss of rights in conducting business, including being ineligible to serve as a company director or executive in some positions.

• Negative impact on credit history, making it difficult to obtain loans or financial support in the future.