Economics Justice Minister: New Bankruptcy Bill Emphasizes Recovery

[Georgealbert]

 

Picture courtesy of SiamRath.

 

The new draft Bankruptcy Act aims to prioritise economic recovery over punitive measures, Justice Minister Pol Col Tawee Sodsong has said, emphasising its benefits for both businesses and individuals.

 

Speaking at the King Prajadhipok’s Institute during the 4th Contemporary Policy Seminar on 22 August, Pol Col Tawee, who also chairs the special committee reviewing the bill, stressed the need for a major reform of the country’s bankruptcy laws. The minister highlighted that the legal system must offer a pathway for both businesses and citizens to regain financial stability with dignity.

 

Thailand’s debt situation remains critical. Official figures show over 18 trillion baht in enforceable debts, with bankruptcy cases accounting for an additional 7.8 trillion baht, bringing total debts in the judicial system to around 25 trillion baht, approximately eight times the national annual budget.

 

Pol Col Tawee noted that current restructuring mechanisms have successfully helped large companies, including airlines, hotels, and real estate businesses, to reorganise debts and continue operations, preserving jobs and maximising creditor repayments. However, small and medium-sized enterprises (SMEs), numbering more than 3.2 million, have largely been excluded. The new legislation seeks to extend recovery mechanisms to SMEs, including automatic stays on debt payments and allowing courts to approve recovery plans even without unanimous creditor consent, provided the plan is fair and reasonable.

 

Significantly, the draft bill also introduces mechanisms to assist individuals for the first time, targeting vulnerable groups such as farmers, civil servants and small business owners with livelihood-related debts.

 

Key principles of the proposed law include:

 

• Second chance recovery: Honest debtors with sustainable income can apply for rehabilitation.

 

• Separation from bankruptcy stigma: Debtors completing a recovery plan will not be labelled bankrupt.

 

• Protection of guarantors: Reduces the transfer of debt problems to family members.

 

• Honesty-focused framework: Encourages repayment by genuine debtors.

 

Pol Col Tawee concluded, “A good law is not one that punishes the hardest, but one that allows those who have fallen to rise again with dignity.” He expressed hope that the bill would not only pass in parliament but also earn the confidence and support of the public.

 

The seminar featured expert panel discussions, including contributions from Mr. Pichai Nilthongkam, Dr. Pornpat Tantikulanan and Associate Professor Dr. Nisit Intamano, and attracted a large audience of students and members of the public interested in legal reform.

 

  Adapted by Asean Now from SaimRath 2025-08-24