Comparison of Bankruptcy Act in United States and Indonesia

Bankruptcy Act in the US (BAPCPA - Last Amendment)

Based on the US bankruptcy law, the United States bankruptcy application can be filed by the
debtor or creditor.
For the case of filing of bankruptcy by the creditors (involuntary case), it would be based on
the following conditions:
1. Conducted by 3 or more creditors
2. If there are less than 12 people holding the debt claims, but not including employees or
people in the company, and the principal debt has not been fulfilled, then it can combine itself
so that the principal debt of at least 14,425 US Dollars is fulfilled
3. If the debtor is in the form of partnership:
a. Performed by a small portion of the main partners
b. If relief efforts have been ordered, bankruptcy filing is carried out by the main partners
in the partnership, the curator appointed by the main partners, or the debt claim holder for
the partnership
4. Conducted by foreign representatives of assets, over foreign bankruptcy proceedings
against debtors.
As for the case of filing of bankruptcy by the debtor (voluntary case), the debtor could
file for bankruptcy based on bankruptcy law in the United States under the provisions of chapter
7 Title 11 Bankruptcy Code, resulting in the debtor being in an Automatically Stays. The debtor
would be able to be given opportunity to change their application which were previously under
regulation of chapter 7 to chapter 11, 12, or 13. Bankruptcy statements entered under chapter
11 Title 11 The Bankruptcy Code often refers to reorganization. All parties who have interests
in bankruptcy applications, can submit a reorganization plan, if, and only if:
1. The curator has been appointed based on Chapter 11 of the Bankruptcy Code
2. The debtor has not submitted a plan for reorganization before 120 days after the order
of relief is announced
3. The debtor has not submitted the reorganization plan previously agreed upon, before
180 days after the order of relief is announced
Bankruptcy law in Indonesia
According to indonesian law number 37 year 2004 bankruptcy act they mentioned that a
company will go to bankruptcy if:
 1. Debtor company has 2 or more debt the organization cannot pay
2. A company can go through bankruptcy if there is a minimum of two unpaid creditos
3. Debtor has to be insolvent as in unable to pay 50% of its debt
According to the bankruptcy law in indonesia it is stated that when a company goes to
bankruptcy they lose their civil right of their company as in they are now not in control and
unable to run the company anymore, this is called ‘freezing’ and is mentioned in article 24 dash
1 in indonesia's bankruptcy act. A judge would be appointed to settle the bankruptcy of the
company. The bankruptcy issue could be solved in one of four ways:
1. Cancelation of bankruptcy after creditors have been settled lawfully
2. Cancelation of bankruptcy based on the judge’s decision
3. Liquidation
4. forgiveness/ peace
In indonesia there is a lot of attempt to protect debtors from being liquidated that is why there
is an organization called PKPU. Companies going through bankruptcy can appeal to PKPU to
ask for time in order to pay their debt. PKPU laws are mentioned in article 222 till 294 of the
indonesian bankruptcy act
Differences in Bankruptcy law in United States and Indonesia
In Indonesia, it was not clearly stated which parties that can not file petition for bankruptcy
statement. Contrarily, United States law stated clearly which parties that can not file
bankruptcy, which are: companies that are engaged in railway construction. Domestic
insurance company, banks, depository banks, cooperative banks, savings and loan institutions,
building and loan institutions, homestead agency new capital financing companies, small
business investment institutions, credit unions or industrial banks or similar institutes, or
foreign insurance companies, and foreign banks. Bankruptcy petition also cannot be submitted
to: farmers, farmer families, or non-profit company, business, or trade companies, in
bankruptcy law applied in United States.In indonesian bankruptcy law, parties that are able to
file bankruptcy as an applicant besides creditor and debtors are distinguished into four
categories: Public prosecutor's office, bank indonesia; if the debtor is bank, Capital Market
Supervisory Agency; if the debtor is securities companies, stock exchanges, clearing and
lending institutions, depository and settlement institutions, and Minister of finance, if the
debtor are insurance company, reinsurance company, pension fund, state-owned enterprise that
is engaged in public interest.
Meanwhile, bankruptcy act in US does not distinguish the parties that are able to file
bankruptcy as an applicant as regulated in Indonesia.
In bankruptcy law regulated in Indonesia, in postponement of debt repayment obligations, a
curator or administrator is in charge in accompanying the management of the company to do
restructuration. The administrator also oversees the reorganization process in postponement of
debt repayment obligations. Meanwhile, Bankruptcy Act in the US, chapter 11, title 11,
Bankruptcy code, the reorganization of a company is fully handled by the management.

References

United States of America, The United States Bankruptcy Code Title 11.

Indonesia, Undang-Undang Kepailitan Dan Penundaan Kewajiban Pembayaran Utang, UU

No. 37 Tahun 2004, LN No. 131 Tahun 2004, TLN. No. 4443