Section 567: Surety to substitute creditor

1) After the surety has, on behalf of the principal debtor, repaid the loan to be repaid or discharged the obligation to be discharged to the creditor under the contract, the surety shall substitute the creditor in relation to such loan or obligation, and, as the substitute creditor, be entitled to recover the loan from, or institute legal action against, the principal debtor.

2) Notwithstanding anything contained elsewhere in this Chapter, the principal debtor shall pay to the surety the sum of loan repaid by the surety or all amounts in consideration for the obligation performed by the surety on behalf of the principal debtor, as well as interest or any other fee or amount chargeable thereon.

3) If it becomes necessary to institute legal action because of the default of the principal debtor to pay the amount payable by him or her under sub-section (2) or if any other expenses need to be incurred in this regard, the surety shall be entitled to recover also such expenses from the principal debtor.