Tag: PKPU

Suspension of Debt Payment Obligations (PKPU)

In the business world, the problem of debt and receivables has become a very common problem, many entrepreneurs complain about this problem because it can result in the company’s cash flow decreasing. One of the ways to solve these problems can be solved by Suspension of Debt Payment Obligations (in Indonesian: Penundaan Kewajiban Pembayaran Utang, abbreviation: PKPU) which can be submitted to the Commercial Court.

The legal basis for PKPU has been regulated in Law Number 37 of 2004 concerning Bankruptcy and PKPU or abbreviated as UUK 2004 in Article 222 paragraph (2). Which states that:

 “Debtors who cannot or expect not to be able to continue paying their debts that are due and collectible may request a suspension of debt payment obligations with a view to submitting a reconciliation plan which includes an offer to pay part or all of the debt to creditors.”

In Indonesian law, PKPU is divided into two, namely Temporary PKPU and Permanent PKPU. Temporary PKPU is decided by the Commercial Court and is valid for 45 days after the decision is readout. Within these 45 days, the Debtor is required to make a reconciliation plan and a scheme for the settlement of his debts to the Creditor. Meanwhile, the Permanent PKPU will take effect within 270 days of the provisional PKPU decision being readout. Within those 270 days, the Debtor has prepared a plan for the settlement of his obligations, not the deadline for repayment. If there is no agreement between the Debtor and Creditor by the time limit, the Commercial Court will decide the Debtor is bankrupt and confiscate the property the Debtor owns in order to pay off the debt.

We can conclude that PKPU is one of the simple, fast, and low-cost business dispute resolutions. Because it doesn’t take as long as a Civil Lawsuit in District Court.