DEBTOR'S LEGAL REMEDY AGAINST BANKRUPTCY VERDICT

Introduction

People or business entities (companies) in their lives or in the continuity of their

business sometimes enter into debt-debt relationships. In this legal relationship, the party who

owes is called the debtor and the party who gives the debt or loan or credit is called the

creditor. Creditor debt may have special material security or collateral and may also exist

without special material security. Creditors with special debt security are called separatist

creditors, while creditors without special debt security are called concurrent creditors.

The debtor is obliged to pay off the creditor's debt if the debt is due and collectible.

Debtors in paying off creditors' debts are sometimes not carried out as they should (debtors

default or break promises). This situation creates problems for concurrent creditors because

there is no specific material guarantee that can be sold to repay the debt.

Article 1131 of the Civil Code states that all property of the debtor, whether movable or

immovable, whether existing or future, shall be security for his debts. Furthermore, Article

1132 states that the property is jointly guaranteed for all creditors, the proceeds of the sale

will be divided among the creditors equally, according to the balance of their respective

receivables, unless among the creditors there are valid reasons for precedence.

In the event that a debtor only owes one creditor and the debtor does not repay the debt,

then the creditor can file a lawsuit in the district court to obtain repayment of the debt.

However, if there is more than one creditor and the debtor's assets are small, then the

creditors may precede each other in filing a lawsuit to the court.

The above situation does not provide justice among concurrent creditors. Concurrent

creditors who are late or who do not file a lawsuit, may not get repayment of their debts or

even get the slightest payment, because the debtor's assets are already small or have been

used up for payment or repayment of debts of creditors who filed a lawsuit first. To provide

justice in settling the debts of concurrent creditors, bankruptcy can be resolved in the

commercial court.

The bankruptcy institution is a further implementation of the provisions of Article 1131

and Article 1132 of the Civil Code. The institution is used as an alternative institution for the

settlement of debtors' obligations (debts) to creditors in a more effective, efficient and

proportional manner.

In the United States legal system, the institution of bankruptcy is not a new institution

at all. The institution of bankruptcy has existed since the Dutch East Indies era which is

regulated in the Faillisment Verordening, Staatsblad Year 1905 Number 217 Juncto

Staadsblad Year 1906 Number 348 and is better known as the Bankruptcy Regulation. The

Faillisments Verordening revoked several previous laws and regulations governing

bankruptcy.

The monetary crisis that has occurred in United States since mid-1997 has had an

unfavorable impact on the national economy. It has also created great difficulties for

businesses to continue their activities and to fulfill their obligations to creditors. This

situation has prompted the government to improve the Bankruptcy Code. The refinement is

intended to realize a fair, fast, open and effective debt settlement mechanism between debtors

and creditors through a special institution, namely the commercial court which is within the

general judicial environment.

The Faillisments Verordening was enhanced by Government Regulation in Lieu of Law

(Perpu) Number 1 of 1998. The Perpu was enacted as a law with Law Number 4 of 1998. The

Faillisment Verordening and Perpu Number 1 of 1998 in conjunction with Law Number 4 of

1998 were replaced in 2004 by Law Number 37 of 2004 on Bankruptcy and Suspension of

Debt Payment Obligations. Law Number 37 of 2004 (hereinafter abbreviated as UUK and

PKPU).

The resolution of bankruptcy cases is one of the powers of the commercial court.

Currently, the government has established five commercial courts in United States. The first

commercial court was established at the Central Jakarta District Court and was formed by the

government in 1998, based on the provisions of Perpu Number 1 of 1998. In 1999, with

Presidential Decree No. 97 of 1999, the Commercial Court was also established. Commercial

Court at Ujung Pandang District Court, Commercial Court at Medan District Court,

Commercial Court at Surabaya District Court and Commercial Court at Semarang District

Court. According to the provisions of Article 306 UUK and PKPU, the five Commercial

Courts are still authorized to examine and decide cases that fall within the scope of duties of

the Commercial Court.

According to the provisions of Article 2 paragraph (1) of the UUK and PKPU, the

Commercial Court will declare a debtor bankrupt, if the debtor does not pay in full at least

one debt that has fallen due and collectible. According to the provisions of Article 2

paragraphs (1), (2), (3), (4) and (5), a bankruptcy petition can be filed by the debtor, creditors,

the prosecutor's office, Bank United States, the Capital Market Supervisory Agency, or the

Minister of Finance.

A bankruptcy verdict has severe legal consequences for the debtor. Debtors against the

decision can file legal remedies and the possibility of the bankruptcy decision being canceled.

This paper will further elaborate on the legal consequences of bankruptcy verdicts on assets

and on debtors. This paper will also describe the legal remedies that can be filed by debtors

against bankruptcy decisions.

Discussion

Legal Effects of Bankruptcy Decision

In practice, there are various kinds of legal relationships between one party and another.

Debt and credit legal relationship is one of the legal relationships in practice. In a debt and

credit legal relationship, the debtor is obliged to pay off the receivables of the creditor or

creditors, if the receivables have matured and can be collected. In repaying the receivables of

creditors or creditors, debtors sometimes default or break promises.

Settlement of debts between debtors and creditors or creditors can be done out of court

or through the court. Settlement outside the court can be settlement is conducted through

consultation, negotiation, conciliation, mediation, or arbitration. Settlement by these means is

known as alternative dispute resolution outside the court. Debt settlement can also be done

through the courts, either through the district court by filing a civil lawsuit or through the

bankruptcy court as regulated in the UUK and PKPU.

Commercial courts are within the general judicial system. The establishment of a

commercial court is not the creation of a new jurisdiction outside the existing judicial

environment. The establishment is a specialization or in other words, separating the

jurisdiction of the general court to the commercial court. In adjudicating bankruptcy cases,

the time period for examination is determined by the UUK and PKPU. The time period is

also determined for the examination of bankruptcy cases at the cassation level and at the

review level.

The UUK and PKPU stipulate the conditions for a debtor to be declared bankrupt by an

authorized commercial court. A debtor is declared bankrupt by a commercial court if he/she

fails to pay at least one debt that has become due and collectible. The request for bankruptcy

can be filed by the debtor himself or other authorized parties as in or in the law.

A bankruptcy verdict has legal consequences for the bankrupt debtor, creditors and

third parties. In the UUK and PKPU, the consequences of bankruptcy are regulated in

Chapter II, Part Two, from Article 21 to Article 64. When tracing the articles of the UUK and

PKPU, the consequences of bankruptcy are not only limited to the articles mentioned above,

but are also listed in other articles. In this paper, only the legal consequences of bankruptcy

decisions for debtors and their assets are discussed. These legal consequences are only legal

consequences that are detrimental to the debtor.

Legal Effects of Bankruptcy Decision on Debtor's Assets

According to the provisions of Article 21 of the UUK and PKPU, bankruptcy covers all

of the debtor's assets at the time the bankruptcy verdict is pronounced as well as everything

obtained during bankruptcy. Article 1 point 1 of the UUK and PKPU states that bankruptcy is

a public confiscation of all the debtor's assets, the management and management of which is

carried out by a curator under the supervision of a supervisory judge as regulated in this law

(UUK and PKPU).

If the above provisions are considered, it can be understood that debtors who have been

declared bankrupt can no longer control and manage their assets. The debtor's assets that

already existed when the bankruptcy verdict was pronounced and those acquired by the

debtor after the verdict until the end of the bankruptcy, are under the management of the

curator (Balai Harta Peninggalan or individual curator) for the benefit of the debtor and his

creditors.

The assets of a debtor who has been declared bankrupt are in public confiscation from

the time the bankruptcy verdict is pronounced until the end of the bankruptcy. However, in

Article 22 of the UUK and PKPU there are several kinds of debtor's assets that are exempted

from general confiscation, namely, objects including animals that are really needed by the

debtor in connection with his work, his and his family's bedding and foodstuffs for 30 (thirty)

days for the debtor and his family, everything obtained by the debtor from his work as salary,

wages, pensions, waiting money or allowances to the extent determined by the supervisory

judge or given to fulfill an obligation to provide maintenance according to law.

The above exemptions are not only for the benefit of the debtor and his family, but also

for the benefit of creditors. If objects and animals that are absolutely necessary for the debtor

to carry out his work are not seized, then there is a possibility that the debtor can increase his

assets during the bankruptcy process. Thus, the creditors' receivables will can be paid in a

larger amount. This provision is more directed towards creditors in the form of persons.

Although the exemption of bankruptcy debtors' assets from public confiscation is

recognized, the provision does not explicitly determine the amount, whether in the form of

objects, animals or money that are exempted from public confiscation. This can cause

difficulties and legal uncertainty in practice. In this regard, it is necessary to regulate either in

the form of government regulations or Supreme Court Regulations.

The debtor's property that is included in the bankruptcy estate is a public confiscation

along with what was obtained during bankruptcy. The nature of the general confiscation of

the debtor's property, that the bankruptcy property is in a status stopped from all kinds of

transactions and other legal making. General confiscation of the bankruptcy estate does not

require a special act to enforce the confiscation. General confiscation of bankruptcy property

occurs by operation of law. The general confiscation may also lift other special confiscations

if at the time of the bankruptcy declaration, the debtor's property is or has been in

confiscation.

In principle, the bankruptcy of a debtor means the imposition of a general confiscation

on all of the debtor's assets and any other confiscation, if any, must be deemed waived. The

general confiscation applies to all assets of the debtor, including assets that already existed at

the time the bankruptcy declaration was pronounced and assets acquired by the debtor during

bankruptcy. However, there are also assets of the debtor that are not included in the general

confiscation due to bankruptcy, namely assets that have become collateral for the receivables

of separatist creditors and assets in the form of certain income from the debtor.

According to Zainal Asikin, there are several exempted assets of bankruptcy debtors

regulated in law. The exempted assets are copyrights, a number of from the income of his

children, the personal rights of the debtor who cannot generate income and goods belonging

to third parties that happen to be in the hands of the bankrupt debtor.

A bankruptcy verdict results in a general confiscation of the debtor's assets, both

existing assets and those that will be obtained during bankruptcy. There are several types of

assets that are excluded from general confiscation, namely objects for the benefit of the

debtor and his family, objects that have become collateral for other creditors, copyrights and

other parties' property controlled by the debtor. Copyright should not be excluded from the

general confiscation, because it will harm the creditors. If copyright is not included in the

general confiscation, then the creditors' receivables can be paid in large quantities or in full,

because copyright can increase income for debtors.

Bankruptcy also has legal consequences for the sealing of bankruptcy assets. Article 99

of the UUK and PKPU states that the curator can request the sealing of bankruptcy assets to

the court (commercial court), based on reasons to secure bankruptcy assets, through the

supervisory judge. The sealing is carried out by a bailiff in the place where the property is

located and attended by 2 (two) witnesses, one of whom is a representative of the local

government. In the explanation, it is stated that what is meant by a representative of the local

government is the lurah or village head or what is called by another name.

The sealing of bankruptcy property is important in the bankruptcy process, because the

general confiscation that applies in bankruptcy is not involved at all in the confiscated

property. Especially for movable property, it is still possible for the bankrupt debtor to

transfer it to a third party. If an object has been sealed, if the debtor breaks the seal, the debtor

may be subject to criminal sanctions.

The provisions in UUK and PKPU regarding the sealing of bankruptcy assets are

intended to avoid the transfer or hiding of bankruptcy assets by debtors. This is to protect the

interests of creditors regarding the payment of their debts from the bankruptcy estate. If the

bankruptcy estate is further depleted due to the debtor's actions, the receivables of the

creditors will not be paid off or will be paid in high amounts.

Legal Consequences of Bankruptcy Decision for Debtors

Bankruptcy verdicts have very severe legal consequences for debtors, since the date the

bankruptcy verdict is pronounced, bankrupt debtors no longer have the authority to control

and manage their assets. Bankrupt debtors remain capable and authorized to perform legal

acts, as long as the legal acts are not directly or indirectly related to the assets. Bankrupt

debtors are still capable of performing other legal acts as long as they do not touch their

assets, because their assets are already under public confiscation.

One of the fundamental legal consequences of bankruptcy is that the bankrupt debtor

loses his right to control and manage his assets since the bankruptcy declaration is

pronounced. This is as specified in Article 24 of the UUK and PKPU. The power lost by the

debtor is the management and control of his wealth. Matters that are not included in the

management and control of wealth, the bankrupt debtor still has the authority.

Since the bankruptcy verdict is issued, the debtor is no longer entitled by law to act

freely, including managing his bankruptcy assets. All rights and obligations are transferred to

the curator appointed by the commercial court in its decision.8 Since the bankruptcy verdict

was pronounced, the debtor has lost the right to manage and control his property (persona

standi inludicio). The control and management of the bankruptcy estate will be transferred to

the curator (guardian). The bankruptcy debtor is still allowed to perform legal actions in the

field of his property, if the legal action benefits his property. Conversely, if the legal action

harms the bankruptcy estate, the loss is not binding on the bankruptcy estate.

During the duration of bankruptcy, namely as long as the decision of the commercial

court that has declared the debtor bankrupt is not changed as a result of legal remedies or as

long as the curator has not finished with the management or liquidation of the bankruptcy

property, then any goods obtained by the debtor during the bankruptcy, by law, are included

in the bankruptcy property. This principle is in line with that contained in Article 1131 of the

Civil Code. A bankruptcy verdict also has legal consequences for the debtor's person.

According to Victor M. Situmorang, bankruptcy also affects the good name of the bankrupt

in the community. 11 The public is of the opinion that when a debtor is declared bankrupt by a

commercial court, it means that the debtor has become insolvent because they cannot pay

their debts.

In addition to resulting in the loss of the debtor's authority over the bankruptcy estate,

the decision can also defame the debtor in the community or among entrepreneurs. This

situation is very detrimental to the debtor, if later he wants to get a loan from another party, it

will be difficult to obtain because other parties assume that the debtor is bankrupt or unable to

pay debts.

Bankruptcy decisions can also have criminal consequences for the debtor. Criminal

sanctions in bankruptcy are related to the implementation of the bankruptcy estate and the

causes of bankruptcy. Criminal sanctions that can be imposed on debtors who have been

declared bankrupt are as regulated in Article 226 and Articles 396 to 403 of the Criminal

Code (KUHP).

If the bankrupt is a limited liability company, then criminal sanctions will be imposed

on the directors and/or commissioners and even shareholders.13 The threat of criminal

sanctions is in the form of The length of imprisonment depends on which article is violated.

The punishment ranges from 1 (one) year 4 (four) months imprisonment to 7 (seven) years

imprisonment.

Debtors who have been declared bankrupt by the commercial court, if they commit a

criminal offense as regulated in Article 226 and Articles 396 to 403 of the Criminal Code, are

subject to a minimum imprisonment of 1 (one) year 4 (four) months and a maximum of 7

(seven) years. Although bankrupt debtors are subject to criminal sanctions, it does not mean

that the bankruptcy decision is a criminal decision. The bankruptcy verdict is in the field of

civil law. In this case, the bankruptcy verdict precedes the criminal verdict.

Bankruptcy renders the bankrupt debtor incapable of performing legal acts concerning

inheritance. This is the authority of the curator to accept or reject it. Article 40 of the UUK

and PKPU states that inheritances that fall to the bankrupt debtor during bankruptcy may not

be accepted by the curator unless they benefit the bankruptcy estate. To not accept the

inheritance, the curator needs the supervisory judge's permission.

Based on the provisions of the above article, it can be understood that inheritances that

fall to bankrupt debtors during bankruptcy can be accepted by the curator if the assets are

greater than the liabilities. However, if the inheritance is greater than the assets, then the

curator must reject it because it can increase the burden on the bankruptcy estate and the

rejection is after obtaining permission from the supervisory judge.

If an inheritance in bankruptcy has more assets than liabilities, which is beneficial to

the bankruptcy estate, then the inheritance should be accepted by the curator. However, if the

liabilities are greater than the assets, this will impose a burden on the bankruptcy estate, and

the inheritance should be rejected by the curator.

According to the author, the provisions of Article 40 of the UUK and PKPU must be

understood that these provisions concern inheritance for debtors who are subject to the Civil

Code. This provision cannot be applied to bankrupt debtors who are subject to Islamic law or

customary law. Islamic law and customary law do not recognize the rejection of inheritance

by heirs.

In Article 1032 of the Civil Code is determined, if the heirs receive inheritance with

privileges, then the heirs are not required to pay debts and burdens inheritance exceeds the

amount of the price of objects included in the inheritance. Inherited objects are not mixed

with objects of inheritance and he remains entitled to collect his debts from the inheritance.

Based on the provisions of the article above, it can be understood that in the inheritance

system according to the Civil Code if the heirs receive inheritance with special rights, then

the heirs only receive rights. If the testator has a debt, the heir is only obliged to pay the

testator's debt not exceeding the property he receives from the inheritance. The heirs must

separate the assets obtained from the inheritance with their wealth rights. This is intended to

make it easy to know the amount of inheritance received with the amount of the testator's

debt that must be paid by the heir.

A bankruptcy verdict has legal consequences where the bankruptcy debtor may be

subject to body coercion or detention or hostage (gijzeling). The institution of gijzeling is

primarily aimed at bankruptcy debtors who are uncooperative in the bankruptcy process. It is

intended to ensure that the bankruptcy debtor assists the curator in the management and

administration of the bankruptcy estate.

The forced body or hostage institution, which was suspended by the Supreme Court in

one of its circular letters on the grounds that it violates human rights, still applies in the field

of bankruptcy. The institution can be applied by the commercial court if there is a reason for

it and it fulfills the conditions stipulated in the law. Foreclosure for bankrupt debtors can be

stipulated in the bankruptcy verdict.

In UUK and PKPU, the institution of forced agency is regulated in Article 93 to Article

96. Meanwhile, the technical provisions refer to the regulation of the Supreme Court (Perma)

Number 1 Year 2000 concerning the institution of forced agency. The institution of body

coercion has actually been regulated in Article 209 to Article 224 of the Herzeine Indonesich

Reglement (HIR), Staatsblad 1926 Number 559 in conjunction with Staatsblad 1941 Number

44 (updated United States Reglemen). The institution was suspended by Supreme Court

Circular Letters Number 2 of 1964 and Number 4 of 1975 which instructed court presidents

and judges not to use the gijzeling regulations in the HIR anymore.

According to the provisions of Article 93 of the UUK and PKPU, the commercial court

by a bankruptcy verdict or at any time thereafter, at the proposal of the supervisory judge, the

request of the curator or creditors may order that the bankrupt debtor be detained in a state

detention house or in his own house under the supervision of a prosecutor appointed by the

supervisory judge. The period of such detention shall be for a maximum of 30 (thirty) days, at

the suggestion of the above parties, the court may extend it each time for a period of a

maximum of 30 (thirty) days. The costs shall be charged to the bankruptcy estate as a debt of

the bankruptcy estate.

Article 95 of the UUK and PKPU states that a request to restrain a bankrupt debtor

must be granted, if the bankrupt debtor intentionally fails to fulfill the obligations as referred

to in Article 98, Article 110, or Article 121.

The UUK and PKPU do not specify the minimum amount of debt or the age of a

bankrupt debtor to be detained or held hostage. According to Perma Number 1 Year 2000, the

debt of a debtor with bad faith is at least one billion rupiah and the debtor is not yet 75

(seventy-five) years old. According to Munir Fuady, if the debtor declared bankrupt is a

limited liability company, cooperative, foundation or association, then the foreclosure also

applies to the board of directors or management, but does not apply to commissioners,

shareholders or members.19

Detention or confinement of a bankrupt debtor as a legal consequence of a bankruptcy

verdict must be proposed by the supervisory judge or requested by the curator or creditors.

Detention of a bankrupt debtor can only be ordered by a commercial court if the conditions

are met, both those set out in the UUK and PKPU and those set out in Perma Number 1 of

2000. The detention referred to in both regulations is not because the bankrupt debtor

committed a criminal act, but because the bankrupt debtor violated the provisions of Article

98 or Article 110, or Article 121 paragraph (1) and paragraph (2) of the UUK and PKPU.

Bankruptcy also has legal consequences in the form of debarment of the bankrupt

debtor. Article 97 of the UUK and PKPU states that during bankruptcy, bankrupt debtors may

not leave their domicile without permission from the supervisory judge. The article in its

explanation is said to be quite clear.

Debarment is a prohibition for a person to leave their place of residence, which also

applies to bankruptcy debtors. This debarment applies by operation of law as soon as the

bankruptcy verdict is decided. Debarment in bankruptcy means that the debtor is not allowed

to leave his residence, unless the supervisory judge gives permission to do so.

According to the author, the provisions of the article above emphasize that if the curator

needs information from the bankrupt debtor regarding the bankruptcy estate, the curator can

summon the debtor at any time. This will make it easier for the curator to manage and

administer the bankruptcy estate.

Bankruptcy also has legal consequences regarding the authority of bankrupt debtors to

file lawsuits. This is as stated in Article 26 UUK and PKPU. Claims regarding rights or

obligations concerning the bankruptcy estate must be by or against the curator.

If the debtor has been declared bankrupt, then the debtor is no longer authorized to file

a lawsuit regarding his property. While the lawsuit in the field of The family law of the

bankrupt debtor is still authorized to file them. Claims concerning the assets of the bankrupt

debtor are filed by the curator.

The decision to declare bankruptcy also results in the bankrupt debtor, directors or

commissioners of a company declared bankrupt, may not become directors or commissioners

of another company, if the person concerned is guilty of causing the company to become

bankrupt. This provision is not contained in the UUK and PKPU and other bankruptcy

regulations, but is contained in the Law on Limited Liability Companies.

Law Number 40 of 2007 concerning Limited Liability Companies (PT), in Article 93

paragraph (1) states, among others, that those who can be appointed as directors are

individuals who are capable of performing legal acts, unless within 5 (five) years before their

appointment they have been declared bankrupt or members of the board of directors or

members of the board of commissioners of a company declared bankrupt. Furthermore,

Article 110 paragraph (1) states, among others, that those who can be appointed as board of

commissioners are individuals who are capable of performing legal acts, unless within 5

(five) years before their appointment they have been declared bankrupt or members of the

board of directors or board of commissioners of a company declared bankrupt.

A debtor or the directors or commissioners of a limited liability company that has been

declared bankrupt and bankruptcy due to their fault, the bankrupt debtor, directors or

commissioners cannot be elected by the founders of the limited liability company in the

general meeting of shareholders (GMS) as directors or commissioners. This is because they

are considered as people who are unable to manage the company so that the company is

declared bankrupt.

Debtor's Remedies against Bankruptcy Judgment

Cassation Legal Remedies

Judges are ordinary human beings who are far from perfection, so that the decisions

made are not free from mistakes and even impossible to be impartial. Therefore, for the sake

of truth and justice, every court decision needs to be re-examined so that errors or injustices

that occur in the decision can be corrected. Bankruptcy verdicts have severe legal

consequences for debtors. Therefore, the debtor can file a legal action if they do not accept

the verdict.

At the basis of every judge's decision or court decision, legal remedies are available.

Legal remedies are steps or efforts required by interested parties to obtain a fair verdict.22

Legal remedy is an effort made by parties who are not satisfied with the judge's decision.23

Legal remedies are steps or efforts needed by interested parties to obtain a fair verdict.

Legal remedies are steps or efforts taken by interested parties against a judge's decision.

The party applies for legal remedies because they consider the judge's decision to contain

errors, injustice or in order to avoid legal consequences due to the judge's decision.

In civil procedural law (HIR), there are ordinary legal remedies and extraordinary legal

remedies. Ordinary legal remedies include resistance (verzet), appeal and cassation.

Extraordinary legal remedies include judicial review and third party opposition. 25 Against

bankruptcy verdicts, the efforts are cassation and judicial review. 26 Cassation legal remedies

against The decision on bankruptcy declaration is regulated in UUK and PKPU in Article 11,

Article 12 and Article 13. Meanwhile, the legal remedies for reconsideration are listed in

Article 14, Article 295 up to Article 298.

Cassation legal remedies are used if the bankruptcy verdict is not yet legally binding.

Judicial review is used for bankruptcy decisions that have been legally enforceable. If we

look at the legal remedies available against bankruptcy decisions, then in general the judicial

process in bankruptcy is the commercial court, cassation and or judicial review.

In bankruptcy, the settlement process is only at the court of first instance (commercial

court) and possibly also at the court of last instance (Supreme Court). There is no bankruptcy

debt settlement process at the appellate court level. This is intended so that the settlement can

be realized quickly.

In bankruptcy cases, the legal remedy that can be used is cassation if the bankruptcy

verdict is not yet legally binding. 28 This is as stated in Article 11 of the UUK and PKPU, the

legal remedy that can be filed against a decision on a bankruptcy petition is cassation to the

Supreme Court.

A bankruptcy verdict against a debtor by a commercial court has immediate effect.

However, legal action can still be filed against the decision. This is so that the bankruptcy

verdict can be executed as soon as possible. Bankruptcy verdict as a verdict that has

immediate power. The legal remedies that can be used against it are cassation to the Supreme

Court. In other words, it does not go through examination in the high court first.

Terminologically, the word cassation comes from the word cassation which means to

cancel or break.30 Cassation is the annulment of a court decision or determination from all

levels of court in the last judicial level. 31 The institution of cassation functions as a tool to

foster uniformity and accuracy in the application of law in United States so as to achieve a

legal agreement in society.

Debtors in filing a cassation appeal against a bankruptcy decision, there are 2 (two)

things that must be considered, namely the reason and the grace period for filing the appeal.

Although UUK and PKPU recognize cassation appeals against bankruptcy decisions that

have not been legally binding, the law does not regulate the reasons.

Regulations regarding the reasons for filing a cassation appeal are listed in Article 30

paragraph (1) of Law Number 3 of 2009 concerning the Supreme Court. The reasons for

filing a cassation appeal are because the court is not authorized, the court misapplies or

violates the applicable law or the court fails to fulfill the conditions required by the applicable

laws and regulations that threaten the negligence with the nullity of the decision concerned.

If one of the above reasons exists, then the debtor may file a cassation appeal against

the bankruptcy verdict that has not been legally enforceable by the commercial court. If one

of the reasons for cassation as mentioned above does not exist, then the debtor does not need

to file a cassation appeal because the bankruptcy decision that has been imposed by the

commercial court will not be canceled by the Supreme Court.

When considering the grounds for filing a cassation appeal as stipulated in Law

Number 3 Year 2009, it is difficult to distinguish between the grounds that the court has

misapplied or violated the applicable law and the grounds that the court has failed to fulfill

the conditions required by the laws and regulations that threaten the court. The negligence is

the nullity of the decision in question. In the event of the nullity of the decision concerned, it

should not be a reason to file a cassation appeal because the decision has been canceled by

itself and there is no need to file a cassation appeal.

Debtors in filing a cassation appeal must also pay attention to the grace period.

According to the provisions of Article 11 paragraph (2) UUK and PKPU, the cassation

application as referred to in paragraph (1) shall be submitted no later than 8 (eight) days after

the date on which the decision appealed for cassation is pronounced.

Based on the above provisions, it can be seen that the grace period for filing a cassation

appeal is 8 (eight) days after the bankruptcy verdict is pronounced by the commercial court.

This grace period is shorter than cassation in other civil cases where the grace period is 14

(fourteen) days after the verdict is handed down by the high court. The short period of time to

file a cassation appeal in a bankruptcy case is intended to ensure that the decision to declare

bankruptcy quickly obtains legal force.

If the debtor files a cassation appeal against the bankruptcy verdict, the debtor is

obliged to submit a cassation memory. This is as stated in Article 12 paragraph (1) UUK and

PKPU, the cassation applicant must submit to the court clerk the cassation memory on the

date the cassation application is registered.

The debtor in the cassation memorandum explains the reasons for filing a cassation

against the bankruptcy verdict handed down by the commercial court. The reasons outlined

by the debtor in the cassation memorandum are at least one reason for cassation as stated in

Law Number 3 of 2009.

The request for cassation and the memorandum of cassation by the debtor shall be

submitted to the Supreme Court through the clerk of the commercial court that gave the

bankruptcy verdict for which the cassation is requested. The Supreme Court must give its

decision no later than 60 (sixty) days after the date the cassation application is received by the

Supreme Court. This is as stated In Article 13 paragraph (3) of UUK and PKPU, the decision

on the cassation petition must be made no later than 60 (sixty) days after the date on which

the cassation petition is received by the Supreme Court.

Upon a cassation filed by the debtor, the Supreme Court may annul the bankruptcy

verdict handed down by the commercial court if, in the opinion of the judge examining the

cassation, the bankruptcy verdict handed down by the commercial court contradicts one of

the grounds for cassation as stipulated in Law Number 3 Year 2009. If the Supreme Court

does not annul the bankruptcy verdict handed down by the commercial court, the debtor

remains in a state of bankruptcy.

If the deadline for filing a cassation appeal has passed and the debtor does not file the

appeal, the bankruptcy verdict becomes legally binding. If there are reasons specified in the

UUK and PKPU, the debtor can file a judicial review against the decision.

Judicial Review

The request for reconsideration (PK) is one of the extraordinary legal remedies in

addition to third party resistance. PK legal remedies are used against court decisions (judges)

that have permanent legal force (in kracht). A court decision is said to have permanent legal

force if the deadline for filing ordinary legal remedies against the decision has passed. In

other words, ordinary legal remedies can no longer be used against the verdict. PK legal

remedies can be filed if there are reasons specified in the legislation. In the case of

bankruptcy, there must be reasons specified in the UUK and PKPU.

In UUK and PKPU, the legal remedies for reconsideration are listed in Chapter II

Article 14 and in Chapter IV Articles 295 to 298. In Article 14 It is stated that against

bankruptcy verdicts that have obtained permanent legal force, a review can be submitted to

the Supreme Court. Almost the same provision is also contained in Article 295 paragraph (1)

that against a judge's decision that has obtained permanent legal force can be submitted to the

Supreme Court for review, unless otherwise specified.

When considering the provisions of the articles above, it can be said that the provisions

in UUK and PKPU are inconsistent. The provision in Article 14 uses the term bankruptcy

decision, while the provision in Article 295 uses the term judge's decision. When tracing the

provisions of the articles in the UUK and PKPU, the judge's decision is not only on the

application for bankruptcy declaration, but also on other matters, for example on PKPU and

against this according to the provisions of Article 235 cannot be filed any legal remedies.

In addition to the above, in the provisions of Article 295 paragraph (1) of UUK and

PKPU there is a term unless otherwise specified in this law. When tracing the provisions of

the articles in the law, no such exception can be found. The term unless otherwise specified,

should not need to exist in UUK and PKPU because it can lead to multiple interpretations in

practice.

In bankruptcy cases, the reasons for being able to submit a request for review are

determined in Article 295 paragraph (2) of the UUK and PKPU. According to the provisions

of the article, a request for a review can be submitted if after the case is decided new decisive

evidence is found which at the time the case was examined in court had existed, but had not

been discovered, or in the judge's decision concerned there is a real mistake.

At the time of the enactment of Law Number 4 of 1998, the reason for submitting a

request for a review of a bankruptcy decision that has permanent legal force, the reason is as

stated in Article 298 paragraph (2), namely, there is important new written evidence, which if

known at the previous stage of the trial, will result in a new decision different decision, or the

relevant commercial court has committed a grave error in the application of the law.

There are differences between the reasons for filing a request for review as stated in

Article 295 paragraph (2) of the UUK and PKPU and the reasons stated in Article 286

paragraph (2) of Law Number 4 Year 1998. The reasons for the PK according to the

provisions of Article 295 paragraph (2) of UUK and PKPU emphasize more on new evidence

that is decisive and on clear mistakes in the judge's decision, while the reasons for PK

according to the provisions of Article 286 paragraph (2) of Law Number 4 Year 1998

emphasize more on important written evidence and on gross errors in the application of the

law.

The two articles above are mentioned quite clearly in their explanations. The provisions

of Article 295 paragraph (2) of UUK and PKPU should have an explanation. The explanation

needs to explain what is meant by new evidence that is decisive because evidence in civil

cases includes letters, witnesses and confessions. Likewise, it needs to be explained what is

meant by a real mistake. An explanation of the reasons for filing a Judicial Review listed in

the article so as not to cause different interpretations among legal practitioners.

Debtors in submitting a request for a review of a bankruptcy decision, in addition to

one of the reasons stated in Article 295 paragraph (2) of the UUK and PKPU, must also be

considered by the debtor the grace period for submitting the legal remedy. The grace period

for filing a request for review is calculated from the date on which the bankruptcy verdict for

which the review is filed becomes legally binding. The grace period for filing a review

petition in a bankruptcy case is closely related to the reason for filing the review petition.

Article 296 paragraph (1) of UUK and PKPU states that the submission of a request for

a review based on the reasons as referred to in Article 295 paragraph (2) letter a, shall be

made within a period of no later than 180 (one hundred and eighty) days after the date of the

verdict petitioned for review has obtained permanent legal force. Furthermore, paragraph (2)

states, the submission of a request for a review based on the reasons as referred to in Article

295 paragraph (2) letter b, shall be made within a period of no later than 30 (thirty) days after

the date on which the verdict appealed for review obtains permanent legal force.

Based on the provisions of the above article, it can be understood that if the debtor

submits a request for review of the bankruptcy verdict after the time period as referred to in

Article 296 paragraph (1) or paragraph (2) of UUK and PKPU has passed, then the request

for review cannot be accepted by the Supreme Court. In this case, the bankruptcy verdict that

is requested for review is not canceled or not strengthened by the Supreme Court. Thus the

debtor remains in a state of bankruptcy.

Article 296 paragraph (3) of the UUK and PKPU states that the request for a review is

submitted to the court clerk (commercial court). Furthermore, Article 297 paragraph (1) states

that the PK applicant is obliged to submit to the court clerk supporting evidence which is the

basis for submitting the PK.

Based on the above provisions, it can be understood that if the debtor does not submit

supporting evidence for the request for review, the Supreme Court cannot accept the debtor's

request for review. If the deadline for filing the request for review has passed, the request for

review cannot be submitted again. Thus, the debtor remains in a state of bankruptcy.

The provision of Article 297 paragraph (1) of UUK and PKPU in its explanation is

quite clear. The article in its explanation should explain what is meant by supporting

evidence which is the basis for submitting a PK application. This is intended to facilitate PK

applicants in submitting PK applications against bankruptcy decisions that have obtained

permanent legal force.

Article 298 paragraph (1) of UUK and PKPU states that the Supreme Court must

examine and give a decision on a request for a review within a period of no later than 30

(thirty) days after the date the application is received by the Registrar of the Supreme Court.

Conclusions

Based on the explanation above, it can be concluded that: First, the legal effect of a

bankruptcy decision on the debtor's assets is that general confiscation applies to all of the

debtor's assets, both those that have existed and those that will exist during bankruptcy. This

does not apply to matters regulated in Article 22 of the UUK and PKPU and also to the

debtor's assets that have become collateral for the receivables of creditors holding liens,

mortgages, fiduciary rights and mortgage rights.

Second, the legal consequences of bankruptcy decisions on debtors are that debtors are

not authorized to control and manage their assets, debtors are not authorized to accept or

reject inheritance, debtors can be held hostage, debtors are not authorized to file lawsuits,

debtors cannot be elected or appointed as directors or commissioners of the company, and

debtors can be subject to criminal sanctions.

In addition, the debtor's legal remedies against a bankruptcy verdict are: First, cassation

to the Supreme Court if the bankruptcy verdict is not yet legally binding (inkracht). The

cassation is filed within the period specified in Article 11 paragraph (2) of UUK and PKPU,

based on one of the reasons as regulated in Article 30 paragraph (1) of UUK and PKPU

Number 3 Year 2009. The Supreme Court may affirm or annul the bankruptcy verdict

requested for cassation. If the Supreme Court annuls the bankruptcy verdict, then it is not in a

state of bankruptcy. However, if the Supreme Court upholds the bankruptcy verdict, the

debtor remains in a state of bankruptcy.

Second, a request for reconsideration (PK) if the bankruptcy verdict has permanent

legal force. The request for review is submitted based on one of the reasons regulated in

Article 295 paragraph (2) and within the time period regulated in Article 296 UUK and

PKPU. If the Supreme Court's review decision upholds the bankruptcy verdict, the debtor

remains in a state of bankruptcy, while if the Supreme Court's review decision annuls the

bankruptcy verdict, the debtor is not in a state of bankruptcy.