“Home ownership is the dream of everyone. Many people are willing to take a long-term burden to own a house. But along the way, before owning a house, an accident or some situation may happen that affects financial liquidity, which is an important factor in sequestration”. Before buying a house, you must check your financial status well to make sure that the cost for the house installment loan is not more than 30% of total income each month. If it is over 30%, it is considered a risk. Furthermore, if you have other burdens, such as car payments, the chance that you cannot pay installments is even higher. And when a cash-flow problem happens, many people will decide to solve the problem in the wrong way – by cutting the house mortgage payment that leads to prosecution and sequestration in the end. To prevent homeowners from making this mistake, TerraBKK has provided the right solution – Restructuring and compromising with financial institutions. Debt restructuring and compromise are not the same. Restructuring may be made at the time that a debtor feels that they cannot pay the mortgage and asks to sign a new contract to pay a debt that is more flexible and appropriate for total income each month, or seek refinancing from other financial institutions that they never owed prior, whereas compromise will happen when debtors don’t pay the installment for 3 months in a row. Moreover, creditors or financial institutions will have sent a letter to inform settlements, but the debtor is still silent and doesn’t pay any installment until the creditor prosecutes in court to seize the property. If the debtor doesn’t change their behavior, this house will belong to the bank and sold to repay the debt. But if the debtor asks for a compromise, the situation will be better. As for compromise, there are many methods. It’s usually done in two phases – 1. The bank has issued a warning, but has not yet filed a lawsuit. 2. The bank has issued a warning, and filed a lawsuit. When compromising before a lawsuite has been made – there are several methods to move forward: 1. Asking for deferral debt – To delay the arrears for up to 36 months in one of 3 ways: • 1.1 Pay installments every month until the debt is gone. • 1.2 Pay the whole debt scheduled at one time • 1.3 Pay lump sums in installments over the period of the agreement every month 2. Extension of time to pay debt , to extend the time to pay in installment. Debtors can request an extension for up to 30 years or until the age of debtor reaches 70. When it is extended, a new debt must be evaluated. So, the longer period will reduce monthly payments. 3. Request more loans to pay the interest – Debtor can request more loans to pay only accrued interest payable with a request for extension if the accrued interest payable is more than the principle. Provided that there is a period of 3 months before borrowing, debtors must pay the debt continuously and the new debt must be more than 25% of the original amount. 4. Request for payment on only the monthly interest – Permission to do this will be granted only if the debtor has a good record. Proceed once throughout the borrowing and pay installments for up to 12 months. 5. Request for pay under normal period – Proceed once throughout the loaning and pay installments for up to 2 years, but the amount of payment must be more than monthly interest by at least 500 THB. 6. Request for a reduction of interest rate for a special case – When the debtor‘s interest rate is adjusted to higher than normal, debtors are able to request for a reduction of interest rate on the payment date in the case that debtors pay installments and interest in one day or pay a lump sum equal to 3 periods at once. 7. Request a temporary property transfer to the bank and buy back later – This way is just like selling on consignment and renting your own house. The bank will receive collateral and recoup up to 90% of the collateral price. If it isn’t enough to pay all of the debt, the debtor will pay the difference on the transfer date. It has a rental charge that is 0.4-0.6% of the collateral price and requires signing a lease agreement that is an annual agreement with 1 month paid in advance. If the debtor wants to buy it back, the bank will sell it back. So, the resale price is determined by considering outstanding debt and insurance debt, and the tenant can apply for new credit. As for compromise when a lawsuits has been filed by the financial institution: debtors have several ways of preventing their property from being seized and auctioned off. 1. Request the bank to delay filing – The debtor can talk to the bank for a request to delay the filing. Provided that the debtor pays according to original contract or pays only the interest punctually for 12 months. If the debtor pays the debt on time completely, the bank will calculate an annuity that will be paid later. 2. Request the bank to withdraw the lawsuit – In this case, the debtor must pay the debt according to a contract and bear other costs in the prosecution process that the bank has already paid for. 3. Request the court to slow down the auction – The debtor must pay the expense that the bank has spent on the prosecution process and pay the debt consecutively not less than 6 times. The remaining debt must not over 80% of the new cost estimate of the property, and a new loan agreement must be signed. 4. Request a compromise - The debtor has to pay all costs and liabilities to financial institutions and redeem the mortgage within a specified time. 5. Request the bank to postpone the sequestration - Debtor must pay all costs and liabilities to financial institutions and redeem the mortgage within three months with a sum of money before. If the asset is worth more than the debt, debtor may request a new loan. 6. Request for the debtor changing due to new loan agreement - the debtor must pay all costs arising from litigation and other expenses from the process of the court early on. Then follow the steps compositions. Then, the debtor will be able to request a new loan. Also, as long as it has not been sentenced to auction, the house still belongs to the homeowner. The homeowner can live, sell it to clear the debt or rent it out without the consent of financial institutions as creditor. “As we have seen, there are so many ways to prevent seizure of the property. Talking sincerely to the bank that you will pay all of the debt to make an agreement when you found that you are going to lack the liquidity is better that missing payments out of sheer lack of responsibility. Not only will you lose your house, your reliability will be lost, too”.