A Normative Distinction & Intermediate Settlement Mechanism Bankruptcy and PKPU in the Indonesian Legal System

Abstract

This research discusses the normative distinction and settlement mechanism between bankruptcy and Suspension of Debt Payment Obligations (PKPU) in the Indonesian legal system. The background of the research departs from the need to clarify the conceptual and procedural limits of the two debt settlement instruments, considering the frequent errors in the application and understanding by the parties. The formulation of the problem is focused on: (1) how the normative differences between bankruptcy and PKPU are reviewed from the applicable regulations; and (2) how the mechanism of each solution instruments in the context of legal protection for creditors and debtors. This study uses normative juridical methods with legislative, conceptual, and case approaches to examine the relevance of norms and their implementation in commercial courts.

The results of the study show that normatively bankruptcy aims to provide liquidation of the assets of debtors who are unable to fulfill their obligations, while PKPU is intended as an effort to restructure debt to prevent bankruptcy through a peace agreement. The fundamental difference is seen in the submission requirements, legal consequences, the position of curators and administrators, and their implications for the debtor's business continuity. In terms of mechanism, there are strict and structured stages both in the process of verifying receivables, voting, and determining decisions by the court. The conclusion of the study emphasizes that normative distinction and settlement mechanisms are both important instruments in maintaining a balance of the interests of debtors and creditors. The suggestions submitted include harmonizing norms, increasing the understanding of stakeholders, and optimizing the role of the court in ensuring the principles of legal certainty and justice.

Keywords : Bankruptcy, PKPU, Debt Settlement Mechanism