Suspension of Debt Payment Obligation

Suspension of debt payment obligation proceeding is a proceeding that gives a limited time for the debtor to convey debt restructuring proposal to all its creditors. Under suspension of debt payment obligation proceeding, a debtor which qualified and has been declared to be in suspension of debt payment obligation has a maximum of 270 days for negotiation of debt restructuring.

The court shall determine the time for negotiation gradually to maximum of 270 days. For the first time, the court shall give the debtor maximum of 45 days to convey debt restructuring proposal to its creditors. Within that time, the debtor and its creditors shall agree whether to continue to negotiate or agree the debt restructuring proposal, otherwise the court shall declare bankruptcy of the debtor. After the first determination of the negotiation time, the court shall determine extension time for negotiation based on voting result conducted by the creditors in a creditors meeting.

In a creditor meeting, the agreement to extent the time for negotiation needs approval from:

1. more than a half (1/2) number of unsecured creditors whose rights are acknowledged (by the administrator) or provisionally acknowledged that collectively holds at least 2/3 (two thirds) of the portion of all acknowledged or provisionally acknowledged receivables from the unsecured creditors that presents or being represented by its attorney in the session, and
2. more than a half (1/2) number of creditor secured by pawn, fiduciary, Tanggungan Right (mortgage), hypothec, or other kind of asset security that collectively holds at least two third (2/3) of all receivables that presents or being represented by its attorney in the session.

The debt restructuring proposal shall be approved as a binding restructuring agreement by the same way.

If the creditor meeting vote to approve the debt restructuring proposal, then the court shall legalize the approval which become a settlement agreement.

If the debtor breaches the settlement agreement, any creditor may file a bankruptcy declaration of debtor due to the breach.

As we are official administrator and receiver (curator) which have been handled many bankruptcy and suspension of debt payment obligation cases, we have a complete understanding of the proceeding to protect client’s interest both as creditor and debtor which involve in the proceedings.