Taking turns

A teacher in Buriram signed as guarantor for five colleagues in 2010.

They stopped paying. Some of them were later declared bankrupt. She is being pursued for the balance — reported at around ฿16 million — and ฿5,900 comes out of her salary every month.

She did not borrow the money.

The Thai phrase for how this happens is ผลัดกันค้ำประกัน — taking turns guaranteeing each other. You sign for a colleague; a colleague signs for you; the colleague you signed for has signed for somebody else. It is not a scandal. It is the ordinary way a Thai teacher gets a loan, and for most of the people doing it, nothing goes wrong.

Why the security is other people

Start with what a teacher has to offer a lender.

A salary from the state, paid monthly, extremely reliable, and almost impossible to lose. That is the asset. Land, if there is any, is usually the family’s rather than the borrower’s, and often held on documents a bank will not take.

So the collateral available to a Thai teacher is not a thing. It is a job, and other people who have the same job.

Which produces a lending system with a specific property, and it is the opposite of what security is supposed to do.

A lender normally reduces risk by spreading it across borrowers who have nothing to do with each other. If one fails, the others are unaffected.

Here every borrower is also a guarantor of other borrowers — in the same profession, on the same payroll, often in the same province and the same school district. The pool is closed. A default does not leave the group. It moves along it.

That is not diversification. It is the reverse, and the loans are cheaper because of it.

What a guarantee used to mean

Now the legal part, which is where the harm actually sits.

Before 2015, a Thai guarantee contract could make the guarantor liable in the same way as a joint debtor — ลูกหนี้ร่วม. The practical difference is everything. A lender facing a joint debtor does not have to pursue the borrower first, exhaust the borrower’s assets, or establish that recovery failed. It can go straight to whoever is easiest to collect from.

And of the people on that contract, the easiest to collect from is a teacher still drawing a state salary.

That is why the deduction arrives before the argument does.

Thailand fixed this in 2015, then amended the fix

The Civil and Commercial Code Amendment Act (No. 20) B.E. 2557 (2014) came into force on 12 February 2015. It rewrote ten sections of the Code and added five more, and two of the new ones matter here.

Section 681/1 provides that an agreement making a guarantor liable in the same manner as a joint debtor, or as a joint debtor, is void — เป็นโมฆะ.

Section 685/1 makes void any guarantee terms departing from the protective provisions, so the first section cannot simply be drafted around.

That is a real reform and it addressed exactly this problem.

And then it was amended again, five months later, which anyone writing about this needs to know.

The Civil and Commercial Code Amendment Act (No. 21) B.E. 2558 (2015) was gazetted on 14 July 2015 and changed s.681/1 — but the change is a carve-out for juristic persons, not a repeal. A guarantor that is a juristic person may consent to be bound as a joint debtor, and if it does, it loses the protections of ss.688, 689 and 690.

That was a business complaint being answered. Corporate guarantees — a parent company standing behind a subsidiary, a company guaranteeing its own borrowing — had been caught by a reform aimed at individuals.

A teacher is not a juristic person. The protection in s.681/1 stands for natural persons, which is who this article is about.

⚠️ Read that sequence carefully before editing this file. Someone who finds only Act No. 20 will overstate the protection’s scope; someone who finds only the 2015 headline — “guarantors may be liable as joint debtors again” — will conclude the reform was undone. Neither is right, and the distinction is a single phrase: ซึ่งเป็นนิติบุคคล, “which is a juristic person”.

⚠️ All of the above is from a law-faculty summary, a government legal office briefing and reporting of the Gazette publication — not from the Gazette text itself. Four attempts to retrieve a primary text returned nothing usable. That must be corrected before publication — see the gate at the top of this file.

And it does not reach backwards

The amendment does not apply to guarantee contracts made before it came into force.

A guarantee signed in 2010 is governed by the law as it stood in 2010.

Which is the whole article.

A ช.พ.ค. welfare loan is not a two-year personal loan. These are long instruments, taken against a career and repaid across most of one — so a guarantee signed before February 2015 can still be running now, and will still be running for years yet.

The protection exists. The contracts causing the harm are outside it, by date.

This publication’s second structural finding is that Thai protections work when they are universal and fail when they are categorical, because the category is always drawn around people who already had options. Article 89 The wrong way round found it drawn around employee. Article 86 Outside is not a workplace found it drawn around workplace. Here it is drawn around a date, and the people outside it are the ones who signed earliest, which in a profession means the oldest.

Nobody decided that. It is what non-retrospectivity does, and non-retrospectivity is a sound principle — you cannot fairly rewrite a contract somebody relied on. The cost of that soundness lands entirely on one side, and it is not the side that lent the money.

Bankruptcy is available to one party

One more asymmetry, and it is the one the Buriram case turns on.

A borrower who cannot pay has a lawful exit. Bankruptcy is a legal process with real and lasting consequences, and it discharges what it discharges.

A guarantor who is still employed has a salary that can be deducted from, every month, whatever else is true.

So the party who took the money can reach the end of a legal process, and the party who signed a form cannot — not because the law favours one over the other, but because enforcement finds whoever is findable, and a teacher on a state payroll is the most findable person in the arrangement.

This archive has now met that principle five times as a burden — the forged-licence buyer with an address, the venue that could be served, the traveller carrying the bag. This is the same shape with a signature instead of a suitcase.

The deadline nobody has mentioned

The practical part, and it is the reason to publish this in September rather than November.

The Government Savings Bank is running an interest reduction for ช.พ.ค. borrowers, cutting the rate to 3.50% a year. It covers borrowers paying normally and borrowers in difficulty — around 280,000 accounts in total. Read the bank’s own statement of 4 September 2026.

Registration closes on 31 October 2026. About 80,000 accounts registered in the first eleven days. That leaves roughly two hundred thousand.

Three conditions a reader needs and the coverage mostly omits.

The 3.50% is not permanent. It runs to December 2027, and from January 2028 the rate returns to MLR or MRR minus two percentage points, on the terms of the original contract. The instalment does not change — the point is that more of each payment goes to principal, so the debt clears sooner. The bank is explicit that this is not debt forgiveness: ไม่ได้มุ่งเน้นการยกหนี้.

Two other dates sit behind the headline one. A borrower who has lapsed out of ช.พ.ค.–ช.พ.ส. membership can rejoin under สกสค.’s rules and register with the bank up to 30 November 2026. A borrower whose loan needs restructuring can go to any branch and get back to normal status by December 2026 and still take the rate.

And the eligible loans are the ones this article is about. The scheme covers the ช.พ.ค.–ช.พ.ส. welfare loans and the เกื้อกูล scheme written between 2005 and 2015 — which is to say, every one of them was signed before the guarantor protection took effect, or in the year it did.

⚠️ This article does not know whether the remaining accounts have chosen not to register or have not heard. Both are possible and the difference matters. What can be said is that the scheme is opt-in, the window is finite, and the date is seven weeks away.

⚠️ It also does not know whether the reduction reaches guarantors as opposed to borrowers, which is the question a guarantor reading this will have first. No source found addresses it, and the article says so rather than guessing. That is the single most useful thing anyone could add to this piece.

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Common misconceptions

“The guarantor only pays if the borrower can’t.” Under a pre-2015 joint-debtor guarantee, the lender need not pursue the borrower first.

“The law was changed, so this is over.” The amendment is not retrospective, and teacher loans signed before it are still running.

“The 2015 change undid the reform.” Act No. 21 carved out guarantors that are juristic persons. A teacher is not one, and the protection stands for individuals.

“Teachers borrowed irresponsibly.” ช.พ.ค. is a state-sponsored welfare loan scheme promoted through the profession. The borrowing was ordinary and encouraged.

“Guaranteeing a colleague is a favour with no cost.” It is a contract. Before 2015 it could make you liable as though you had borrowed the money yourself.

“Bankruptcy protects everybody equally.” It is available to a borrower. A guarantor still drawing a salary can be deducted from regardless.