Abstract
The Indonesian bankruptcy regime tends to be harsh to the debtors, especially the individual debtors. In contrast, the creditors possess the right to pursue the debtor’s outstanding debts even after the bankruptcy process. For that reason, this article aims to argue why it is rational for the Indonesian government to implement a debt discharge policy in the Indonesian bankruptcy regime. This article employs a normative research method, using a conceptual and comparative approach. The result of this study is based on the debtor cooperation theory and the humanitarian theory of debt discharge. Hence, it is rational for the Indonesian government to implement a debt discharge policy for individual debtors. The first and second Sila of Pancasila is also in line with these theories. Consequently, as a member of society, the individual debtor should be treated with dignity and humane values, which includes debt forgiveness. Nevertheless, not every debtor is deserves to be discharged from his debts. Therefore, it is rational for the Indonesian government to implement the debt discharge policy in the amendment of Indonesian bankruptcy law to protect the honest but unfortunate individual debtors.
Highlights
Indonesian bankruptcy regime tends to be harsh and does not provide sufficient legal protection on the debtors, in this case, individual debtors
This study describes the legal status of individual bankrupts’ post-bankruptcy decision and the bankrupt individuals' outstanding debts under the Indonesian bankruptcy legal framework and vaguely argue the importance of providing a debt discharge policy for the individual debtors
It can be concluded that the Indonesian bankruptcy regime does not adhere to the debt discharge policy for the individual debtors, which caused them compelled to resolve the outstanding debts after bankruptcy
Summary
Indonesian bankruptcy regime tends to be harsh and does not provide sufficient legal protection on the debtors, in this case, individual debtors. According to the historical fact, it is undisputed that bankruptcy law was admittedly intended to provide debtors unrelenting treatments in the early time.. Sriwijaya Law Review ◼ Vol 6 Issue 1, January (2022). Rosa Agustina, and Bismar Nasution ruptcy law does no longer viewed as a mechanism to punish or humiliate the debtors.. Since the early 19th century, bankruptcy law has been viewed as a solution to financial distress which is faced by debtors from diverse classes, whether the debtor was a huge corporation or a mere individual.. Rosa Agustina, and Bismar Nasution ruptcy law does no longer viewed as a mechanism to punish or humiliate the debtors. Since the early 19th century, bankruptcy law has been viewed as a solution to financial distress which is faced by debtors from diverse classes, whether the debtor was a huge corporation or a mere individual. For instance, in the United States of America, since the 1960s bankruptcy system had been regarded as a legal protection system, as a part of the Federal Fresh Start Program (debt discharge), a wise financial strategy and as a simple settlement to temporary setbacks.
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