PKPU or Bankruptcy: What Creditors Should Know

Two different routes

Indonesian bankruptcy law provides two routes for a debtor that cannot pay its debts. Suspension of debt payment obligations (PKPU) aims to give the debtor room to restructure, while bankruptcy aims to liquidate the debtor’s assets for distribution to creditors. Either route may be initiated by the debtor or by a creditor, but the expected outcomes are quite different.

In PKPU, the debtor usually continues to run its business under supervision, and the main goal is an agreed composition with creditors. If the composition plan is rejected or cannot be reached, the PKPU may end in bankruptcy.

The role and rights of creditors

Creditors submit their claims to the administrator or curator within the time limits set out in the court’s decision. Claims should be supported by complete documents, such as the contract, invoices, and proof of delivery or of work performed.

At creditors’ meetings, each creditor may present its views and vote on the proposed composition plan. Secured creditors hold a different position from concurrent creditors, so the ranking of each claim should be mapped early.

Practical points to keep in mind

Creditors should track deadlines closely, since a late submission can mean losing the right to take part in certain distributions. Communications with the debtor, administrator, or curator are best kept in writing and dated.

Not every debt can be verified quickly, and debtors often raise their own arguments about the amount or validity of a claim. This article is general information, not legal advice, and each matter should be reviewed on the basis of its own facts and documents.