Exploring Bankruptcy Act Criteria for Thai Businesses

The Thai economy has weathered numerous challenges recently, including the Covid-19 pandemic, a worldwide economic downturn, repercussions from international conflicts, declining exports, and persistent domestic political upheaval. This has led to a surge in bankruptcies, and many other Thai businesses have sought to navigate the business rehabilitation process under Thailand’s Bankruptcy Act.

The Bankruptcy Act allows a creditor, debtor, or specific government agency to file a business rehabilitation petition, given certain conditions. These include the debtor being insolvent, meaning they have more debts than assets. The Bankruptcy Act provides criteria for insolvency, such as debtors declaring their inability to pay their debts or defaulting on payments despite receiving two demand letters from a creditor.

When a business rehabilitation petition is filed, the…