By Emir Pohan

Suspension of Debt Payment: A Closer Look to Creditors’ Options

27 April 2023

image desc

It’s normal for people who owe money to pay it back to whomever they owe it to. However, there are certain times when they may have encountered difficulties repaying their debts or failed to pay the due and payable debts in accordance with the arrangements they have made with their creditor(s).


Following the unprecedented impact of COVID-19 and government policies as the response, businesses have faced significant challenges in satisfying their payment obligations. Many debtors are unable to pay their debts to their creditors; in fact, creditors seek debt recovery as they are also facing financial difficulties. As a result, according to the case court information system (sistem informasi penelusuran perkara – “SIPP”) of the Commercial Court at Central Jakarta, Medan, Semarang, Surabaya, and Makassar, there has been a significant increase in the number of PKPU fillings. There were 641 PKPU fillings recorded in 2020, compared to 434 PKPU fillings in 2019.


Under Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment (“Bankruptcy Law”), a creditor has the option to file a petition for either bankruptcy or PKPU in the Commercial Court. The growth in PKPU filings indicates creditors tend to file a PKPU petition over bankruptcy since PKPU will allow the debtor to continue their commercial operations while dealing with their debts. With PKPU, creditors and debtors may mutually agree to restructure the debts under a composition plan.


Types of Creditors


Upon the commencement of PKPU, all creditors’ claims will be verified, and the administrator will calculate each of the creditor’s voting rights. Creditors are differentiated into three types, which are: (a) preferred creditors, (b) secured creditors, and (c) unsecured creditors. To fully grasp your legal rights and the order of priority as a creditor, you must identify which type of creditor you are.

  1. Preferred Creditor (Kreditur Preferen)


    A preferred creditor is a creditor who has privileges granted by the law due to the nature of their debts. This means they are entitled to receive the first repayment and are given priority over secured and unsecured creditors. In accordance with Article 1139 and 1149 of the Indonesian Civil Code, the preferred creditor is typically creditors that are eligible for tax claims, employee wages, administrator’s fees, and costs of proceedings. Additionally, pursuant to the Decision of the Constitutional Court No. 67/Law-XI/2013, wages are considered the foremost priority to be paid over all types of creditors.

  2. Secured Creditor (Kreditur Separatis)


    A secured creditor is a creditor who is naturally secured by collateral rights, which can be a lien, fiduciary security, security right, mortgage, or other collateral rights over some or all of the debtor’s assets. This implies that if the debtor defaults on their debt, the secured creditor is entitled to take possession of the collateral assets. It is essential to note that during the PKPU proceedings, the secured creditors cannot enforce their rights over collateral, and any enforcement actions that have been initiated must be suspended.

  3. Unsecured Creditor (Kreditur Konkuren)


    An unsecured creditor is a regular creditor with no form of security or collateral against their debt and any privileged rights under the law. As a result, their position is equal to other unsecured creditors.


Throughout the PKPU process, creditors cannot force the debtor to pay the debts unless the debtor can repay the debts equitably according to their relevant proportion – which is known as pari passu pro rata parte.


Voting Rights


The success of PKPU relies heavily on the cooperation and willingness of the debtor and the creditors to negotiate and execute a composition plan. Creditors hold considerable power as they are the ones who decide whether the composition plan is approved or not. However, there is still a possibility that the court may refuse to approve the composition plan for reasons as regulated in Article 285 of the Bankruptcy Law. To be considered valid, the composition plan must be approved at the creditors’ meeting as follows:

  • majority votes of more than 1/2 of the unsecured creditors who are present at the meeting, provided that unsecured creditors voting in favor hold at least 2/3 of all accepted or provisionally accepted unsecured claims held by the unsecured creditors; and

  • majority votes of more than 1/2 of the secured creditors present at the meeting, provided that the secured creditors voting in favor hold at least 2/3 of all claims held by the secured creditors.


Once the court ratifies the composition plan, it will be binding for the unsecured creditors and secured creditors (including the unsecured creditors who are not present at the creditors’ meeting). If there are any dissenting secured creditors, they will then be compensated with the value of the collateral or the actual value of the secured debts, whichever is the lowest.


The court will declare the debtor’s bankruptcy if the creditors do not approve the composition plan.


Understanding the Composition Plan


Although there is no set rule on what needs to be in a composition plan under Bankruptcy Law, if you’re a creditor, you must note certain aspects to ensure the composition plan works out in your favor. Failure to do so could result in financial losses or missed opportunities to recover your debts. Therefore, it is essential to carefully review and analyze the composition plan submitted by the debtor, specifically toward the following matters:

  1. commercial feasibility – evaluate the business by considering its current state, business plan, investment initiatives, financial records, and future prospects to determine whether the business can operate in the long run;

  2. list of claims – reflect the verified creditors, their respective classification, and the exact amount of debt owed to each creditor is precise and accurate;

  3. debt payment terms – consider adjusting the length of payment in a way that can work towards paying off the debt in a timely and efficient manner as well as to avoid the debtor defaulting by taking into account the debtor’s ability to pay back;

  4. security or collateral – request a security or collateral to assure creditors that the debtor will fulfill their debts and safeguard creditors in the case of default;

  5. waiver or amendment of the composition plan – understand the terms and conditions regarding the possibility of waiving or amending clauses in the composition plan;

  6. event of default – various factors result in the event of default and the consequences (e.g., penalties/interest charges, legal actions) that will follow if the debtor fails to meet their obligations;

  7. undertaking, representation, and warranties – understand that the corresponding measures and actions have been included to fulfill all the commitments outlined in the composition plan (including the annexures); and

  8. other provisions – various arrangements, such as transfer of shares or assets, board of directors or shareholders changes, and other similar actions can be/not be made.


Cancellation of Composition Plan


If the debtor fails to comply with the composition plan ratified by the Court, the creditor has the option to request cancellation of the composition plan to the Commercial Court. Usually, the debtor will be given a specific period (typically a maximum of 30 days but can be agreed upon by the parties in the composition plan) to rectify any default. But if the debtor fails to do so within the grace period, the composition plan will be terminated, and bankruptcy proceedings will be commenced.




Following the PKPU proceedings, it’s not all smooth sailing. There may be some challenges in fulfilling the debt obligations, which can be quite prolonged. The main objective of the PKPU is for the debtor and creditors to come up with a composition plan, but sometimes the debtor can’t follow through. As such, it is highly advisable for creditors to thoroughly understand their respective classifications, obligations, and rights and carefully review the composition plan or consider consulting with a legal professional for advice.


By: Emir Pohan, Ataya Felicya and Andrea Editha



This material is prepared for general information purposes only. It is not intended to give legal or any other professional advice, opinion or recommendation and, accordingly, it should not be relied upon. Specific legal advice should be sought before taking any action based on the contents in this material. Please contact us if you need any assistance regarding this matter.

image desc

Emir Pohan


How can we help you?

Let us know what you want, and we will tell you what you need.

Contact Us Contact us