Slowdown sees rise in personal, business bankruptcies
Bankruptcy cases, both personal and commercial, have shown signs of rising due to the economic slowdown this year.
However, the cases will take time after the economy saw slight growth or dropped about one or two years.Bankruptcies increase when people or businesses face a drop in their income to the point that they can no longer pay back creditors, Att Attanont, deputy director-general of the Legal Execution Department, said last week.
When a bankruptcy case enters the court process, it will take at least one year before the case will end and the Legal Execution Department has to open bidding to sell the debtor's assets and pay the proceeds to its creditors.
As of October, the department had 264,232 cases with assets for sale valued at up to Bt3.47 trillion.
In the last fiscal year ended September, the department succeeded in settling 25,717 cases by mediating between debtors and creditors and selling assets for Bt33.14 billion out of an estimated value of Bt33.23 billion.
For this fiscal year, the department targets to clear at least 150,000 cases. In the first two months, it succeeded in clearing 5,026 cases with an estimated value of Bt6.97 billion. It disposed of assets for Bt7.07 billion.
"We have tried to speed up clearing most of the cases in the department by setting up a system that accelerates the sale of assets by proposing a new sales rule to the Justice Ministry early this year that is now under consideration," Att said.
The new rule would cut the sales period from an average of six months currently to only three months. That would help debtors clear their debt and return to doing business again. Creditors also will get money to provide new loans for new business.
However, after the government dissolved the House on December 9, the new rule has to wait for the new government to take it up again.
Meanwhile, the department has tried to speed up asset sales by opening bidding every week and also negotiating with both creditors and debtors to solve their problems.
"We help drive the economy because when bankruptcy assets can be resolved, that will free up assets to do business. We have organised our roadshow to promote the assets for sale. This is a part of speeding up our sales process," he said.