Thai Law Limits Liability of Guarantees; Creditors Must Notify Within 60 Days

Key summary

According to the Civil and Commercial Code, Section 686, when a debtor defaults, the creditor must notify the guarantor within 60 days. Otherwise, the guarantor is released from liability for interest, compensation, and expenses incurred after that date, but remains liable for the principal amount. According to Section 689, the guarantor may request that the creditor enforce the debt against the debtor's assets if it is not unduly burdensome. Section 700 grants the guarantor the right to be released from liability if the creditor grants the debtor an extension without the guarantor's consent, except in cases of financial institutions or guarantees for employment purposes. The Department of Execution has the authority to seize assets or garnish wages based on a court judgment, but the total amount must not exceed the debt amount as stated in the judgment. A guarantor who pays the debt on behalf of the debtor has the right to claim reimbursement from the debtor according to the conditions of the law.