Thailand Passes New Bankruptcy Reform Law to Aid Debtors
Thailand's parliament has passed a major bankruptcy reform law creating new debt relief pathways for individuals and businesses struggling with the nation's household debt crisis, which has reached 16.4 trillion baht. The revised law introd
On September 23, 2025, the revised Bankruptcy Act cleared parliamentary consideration after years of development. Lieutenant Colonel Thawee Sodsaeng, who served as vice chair of the special committee in the 25th parliament and later as chair in the 26th parliament, recounted the bill's long journey. The committee held nine meetings in the 25th parliament before Prime Minister Prayut Chan-o-cha dissolved parliament. In the 26th parliament, the committee convened 23 times, hearing from business leaders, lawyers, financial institutions, and stakeholders through field visits to Nakhon Ratchasima, Songkhla, and Chiang Mai.
The Senate made four amendments, leading to a joint parliamentary committee to resolve disagreements. Key compromises covered debt repayment order, creditor payment timelines for court-approved plans, income and debt thresholds for personal rehabilitation, and job protections for government employees. The law addresses Thailand's household debt crisis, which reached 16.4 trillion baht in the first quarter of 2025—85.9 percent of GDP—requiring mechanisms to help honest debtors restructure debt before bankruptcy.
The new law creates four rehabilitation pathways: large businesses with debt of 50 million baht or more under Section 3/1 rehabilitation; SMEs and individuals with debt between 1 and 50 million baht via expedited processes; accelerated rehabilitation allowing debtors and creditors to negotiate plans before court consideration; and personal rehabilitation for individuals with debt from 100,000 baht upward—a first since the 1926 Bankruptcy Act.
