Reconstructing the Debt Restructuring Mechanism in the Indonesian Law on Bankruptcy and Suspension of Debt Payment Obligations

Abstract

The purpose of the Suspension of Debt Payment Obligations (SDPO) is to prevent a debtor who is in trouble for whatever reason, lacks money, or finds it difficult to obtain credit, from being declared bankrupt. The current Indonesian Bankruptcy Law lacks a debt restructuring mechanism. There need to be improvements to ensure quality, transparency of objectivity and implementation mechanisms, honesty and legal certainty. This study aims to reconstruct the debt restructuring mechanism through the SDPO in the Indonesian Bankruptcy Law to provide legal certainty and benefit for all parties. This research has an Indonesian national scope. This is normative legal research that applies the statute and comparative approaches. Results show that Law Number 37 of 2004 still does not provide a legal framework for an effective corporate reorganization or debt restructuring. This law should be a system created to prepare agreements between creditors and debtors to negotiate based on an analysis of future events. Debtors often fail to postpone their obligation to pay debts not because the debtor did not submit a reconciliation plan, but because an agreement was not reached in the reconciliation process. As Law Number 37 of 2004 does not regulate the form of debt restructuring and company reorganization (including the payment process, payment period, and interest rate reduction) to save the debtor’s company, it is still difficult for the debtor’s company to pay off its debts.