BANKRUPTCY CODE: Changes to increase protection

BANGKOK POST

September 14, 2000

LENGTH: 460 words

HEADLINE: BANKRUPTCY CODE: Changes to increase protection; More safeguards for honest borrowers

BODY:

Amendments to the bankruptcy code should increase protection of the rights of honest borrowers in continuing their careers after being declared bankrupt, according to Manit Suthaporn, director-general of the Legal Execution Department.

Currently bankrupt individuals must leave their jobs, whether in the public or private sectors. Business owners lose the right to their assets after being declared bankrupt, with new revenues seized by the courts to help retire any outstanding debt.

Mr Manit said amending the bankruptcy code would benefit both borrowers and creditors. If bankrupt individuals were able to continue work, it would minimise the social stigma involved and allow more efficient use of the nation's human resources.

The Legal Execution Department yesterday opened a seminar on the bankruptcy code. Recommendations from judges, attorneys and borrowers would be used to draft a report for the Justice Ministry in considering new amendments to the code.

Steel tycoon Sawasdi Horrurngruang agreed that protection for borrowers should be strengthened under the law. He said bankrupt individuals were now held up to ridicule by society.

For the corrupt or dishonest, final judgement should come from the courts, he said, adding that people declared bankrupt should not be classified as all the same.

But he said the law should allow sufficient flexibility for people to continue earning a livelihood while they remain under bankruptcy status.

Prachak Puttisombat, chairman of a committee given the task of reviewing the bankruptcy code, said over the past year officials had reviewed changes to around 90 sections of the code but the work of the committee was now suspended under restructuring between the courts and the Justice Department.

One proposed change would give greater flexibility to bankrupt individuals to petition for a settlement of their accounts.

Mr Prachak said bankrupt individuals should be allowed to resume their business activities.

The legal system could investigate whether new assets or revenues came from post-bankruptcy work, or represented assets hidden away before the court ruling was made.

"I feel that for the bankruptcy process, we should allow individuals to quickly clear their status. The three-year rule will be amended for certain," Mr Prachak said.

He said one problem, in many cases, was that the system was unable to clear seized assets before the bankruptcy period expired, leading to officials having to return assets to borrowers.

Kraisorn Baramee-auychai, Chief Justice of the Central Bankruptcy Court, agreed that more flexibility for honest borrowers was needed. "Few borrowers exercise their rights under the current law to clear their status."

Kochakorn Boonlai

LANGUAGE: English

LOAD-DATE: September 14, 2000