Change in Suretyship Law

Change in Suretyship Law

            The hot issue in social media at present concerning suretyship in favor of one Thai dentist who received scholarship has been widely criticizing by the public.

            The Suretyship Law itself has been recently amended by the Acts No.20 and No. 21 in 2014 and 2015 respectively. The reason why the Suretyship Law needed to be amended could be summarized that the current law at that time did not yield enough merits to protect the rights and render justification to the guarantor and mortgagor who were not the prime debtor and they were only outsiders who agrees to pay the debts on behalf of the debtor if the debtor defaulted. As a matter of fact, most of creditors (mainly banks) with more favorable bargaining power would put down the conditions obligating the guarantor and mortgagor to be liable to the bank as co-debtors. In doing so, the guarantor and mortgagor were not protected by law and many of them encountered bankruptcy lawsuits.

            Interlex Law Office will present details of the Civil and Commercial Code as amended by the Acts No. 20 and No. 21 later on.