Services / Civil and commercial litigation
Lending money and not getting it back
Loan cases are not decided on who is telling the truth but on whether written evidence exists. The statute sets that condition rigidly, and it is where most claims fail before any witness is heard.
The first condition
The first paragraph of section 653 of the Civil and Commercial Code provides that a loan of more than two thousand baht cannot be sued on unless there is some written evidence of the loan bearing the borrower's signature. The operative words are written evidence, not loan agreement. The law does not require a formal document, but there must be something in writing showing the loan and carrying the borrower's signature.
Repayment needs writing too
The second paragraph of section 653 is the one debtors tend not to know. Where the loan is evidenced in writing, repayment may only be proved by producing some writing signed by the lender, or by the loan document having been returned, or by its having been cancelled on its face. Paying in cash without asking for a receipt and without asking for the document back is therefore extremely hard to establish afterwards.
What interest may be charged
Section 654 forbids interest above fifteen per cent per year and provides that where a contract stipulates more, it is reduced to fifteen. That ceiling applies to lending between ordinary persons; financial institutions sit under separate legislation allowing higher rates. A contract stating a steep rate therefore does not mean the lender can recover what it says.
The time limit
There is no special limitation provision for recovering a loan, so section 193/30 applies: where neither this Code nor another law provides otherwise, the period is ten years. Where the loan is repayable by instalments the reckoning may differ, and a part payment or an acknowledgment of the debt affects it too. A claim that looks time-barred is worth having the facts checked first.
Chats and electronic messages
The commonest question is whether a chat can stand in for a loan agreement. The answer is not a plain yes or no: it depends on whether the messages do the work of written evidence under section 653, in showing that a loan was made, in identifying the sender as the borrower, and in bearing a signature in the sense the law recognises. Fall short on any one of those and the claim still cannot be brought.
PREPARE
What to bring
- Whatever shows the loan was made, with the signature or the sending account
- The record of the transfer to the borrower
- Records of any part repayment
- Any demand sent, and proof it was sent
- The messages between you, kept whole
QUESTIONS
Questions this raises
The loan was under two thousand baht with nothing in writing. Can I sue?
Section 653 imposes the written-evidence requirement only on loans above two thousand baht, so a smaller sum is not caught by it. You must still satisfy the court that the loan was in fact made, and in practice the cost of proceedings often outweighs the amount at stake.
The debtor repaid part and then went quiet. What does that do?
A part payment may amount to an acknowledgment of the debt, which bears on how the limitation period runs, and as evidence it also helps confirm that the debt exists. Records of a partial repayment are therefore worth keeping rather than discarding.
LAW
The legislation
- Civil and Commercial Code, sections 653, 654 and 193/30
ENQUIRIES
