A. Personal Guarantor
A personal guarantor is basically a guarantee for a debtor’s debt as stipulated in Articles 1820-1850 of the Indonesian Civil Code. In Article 1820 of the Indonesian Civil Code, Borgtocht or Personal Guarantee is an agreement in which a third party, for the benefit of the creditor, binds itself to fulfill the debtor’s obligations if the debtor cannot not fulfill them. According to Subekti, Personal Guarantee is an agreement between a creditor and a third person that guarantees the fulfillment of the debtor’s obligations.
Personal Guarantor in making himself a guarantee for the debtor’s debts to creditors can be stated in the Deed of Personal Guarantee Agreement by relinquishing its special rights as a guarantee for creditors. Special rights in the Indonesia Civil Code are stipulated in Article 1131 and Article 1134. Further, in Law Number 37 of 2004 on Bankruptcy and Suspension of Obligations for Payment of Debt (“Law 37/2004”), special rights are stated in Article 114, Article 168, Article 169, Article 189 and Article 199.
Personal Guarantee is an accessoir agreement. The existence of the Personal Guarantee must be linked to the main agreement. The links between Personal Guarantee and the main agreement are as follows:
- There is no guarantee without a valid main agreement;
- The amount of the guarantee does not exceed the amount of the main debt;
- The guarantor has the right to propose counterclaims related to the main debt;
- The burden of proof that is placed on the debtor is, within certain limits, binding on the guarantor;
- Guarantee will generally be deleted with the elimination of the main debt.
As a result of the existance of a Personal Guarantee agreement as an accessoir agreement, the following are the legal consequences:
- The Personal Guarantee agreement depends on the main agreement;
- The Personal Guarantee agreement is canceled if the main agreement is cancelled;
- The Personal Guarantee agreement is deleted if the main agreement is deleted;
- The Personal Guarantee agreement attached to the main agreement is also transferred when the main agreement is transferred.
According to J. Satrio in “Hukum Jaminan, Hak Jaminan Pribadi: Tentang Perjanjian Penanggungan dan Perikatan Tanggung Menanggung”, the elements of the formulation of Article 1820 of the Indonesian Civil Code that must be considered are as follows:
- Personal Guarantee is an agreement;
- Personal Guarantor is a third party;
- Guarantees are given in the interest of creditors;
- Personal Guarantor binds itself to fulfill the debtor’s obligations if the debtor defaults; and
- There is a conditional agreement.
As with the guarantee principles in general, Personal Guarantee functions to guarantee the engagement carried out by the debtor if the debtor cannot fulfill its obligations in the engagement. In Personal Guarantee, the Personal guarantor can be asked to fulfill the debtor’s obligations if the debtor cannot fulfill them.
To obtain fulfillment of receivables, creditors can take legal actions against the guarantor. Civil legal remedies against guarantor can be divided into 2 (two) forms i.e., lawsuits for defaults and requests for Bankruptcy or postponement of debt payment obligations.
B. Default Lawsuit
Default as stipulated in Article 1238 of the Indonesian Civil Code is a condition where the debtor is declared negligent by a warrant, or by a similar deed, or based on the binding power of the agreement itself, if this agreement results in the debtor being deemed negligent by the lapse of the allotted time.
Subekti in Hukum Perjanjian divides 4 (four) elements of default as follows:
- Not perform what is stipulated.
- Perform what is stipulated but not as stipulated.
- Perform what is stipulated but not on time.
- Perform something that according to the agreement is not allowed to be done.
In the guarantee agreement, if the debtor is deemed in default, the creditor can take legal action to carry out the execution of the guarantee according to the form of guarantee that has been agreed.
If the debtor defaults on an agreement that has been guaranteed by a Personal Guarantee agreement, then the creditor has the right to demand accountability from the Personal Guarantor. Pursuant to Article 1831 of the Indonesian Civil Code, if the debtor fails to pay his debt, the Personal Guarantor is not required to pay off the debtor’s debt if the debtor’s property has not been confiscated and sold first to pay off the debt.
However, pursuant to Article 1832 of the Indonesian Civil Code, the provisions in Article 1831 of the Indonesian Civil Code can be waived, or in other words, the Personal Guarantor is obligated to pay off the debtor’s debt to the creditor without first confiscating or selling the debtor’s goods provided that:
- The Personal Guarantor has waived his special rights to demand that the debtor’s goods be first confiscated and sold;
- The Personal Guarantor has bound himself together with the debtor especially in a liability manner, in this case the consequences of the engagement according to the principles stipulated for debt liability;
- The debtor can submit a response that only concerns itself personally;
- The debtor is in a state of Bankruptcy;
- Ordered by the Judge.
If one of the conditions stipulated in Article 1832 of the Indonesian Civil Code has been met, the creditor can immediately demand accountability from the Personal Guarantor without first confiscating and selling the debtor’s goods.
If necessary, the creditor can take legal action against the Personal Guarantor to fulfill the obligations of the debtor, by filing a lawsuit for default in the District Court.
C. Bankruptcy and Suspension of Debt Payment Obligations
If the Personal Guarantor does not carry out its obligations as a Guarantor, in addition to legal action for a default lawsuit carried out by the Creditor, it can also be carried out by the application of a Bankruptcy and Suspension of Debt Payment Obligations.
Pursuant to Article 1 point 1 of Law Number 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations (“Law 37/2004”), Bankruptcy is a general confiscation of all the assets of a bankrupt debtor of which the management and settlement are carried out by a curator under the supervision of a supervisory judge. Pursuant to Article 2 paragraph (1) Law 37/2004, Bankruptcy can be filed with the following requirements:
- The debtor has two or more creditors; and
- The debtor does not pay off at least one debt that is due and collectible.
In addition to the two conditions above, the application for a declaration of Bankruptcy must be proven by facts or simple evidence as stipulated in Article 8 paragraph (4) of Law 37/2004.
Pursuant to Article 1 paragraph (2) of Law 37/2004, creditors are people who have receivables due to agreements or laws that can be collected before a court. Based on this understanding, creditors who have receivables based on agreements or laws can apply for Bankruptcy against the debtor. As in Article 1831 of the Indonesian Civil Code, if the debtor is in a state of Bankruptcy or if the Personal Guarantor relinquishes his/her special rights, the creditor can immediately apply for Bankruptcy against the Personal Guarantor.
In addition to Bankruptcy applications, creditors can also submit requests for suspension of debt payment obligations. Creditors can apply for suspension of debt payment obligations against debtors if:
- The debtor has more than 1 (one) creditor;
- The debtor cannot or is expected to be unable to continue paying its debts;
- The debtor has debts that are due and collectible.
If these conditions are met and if the debtor in default or negligent in carrying out the fulfillment of its obligations, then the creditor can apply for a suspension of debt payment obligations against the Personal Guarantor, while remaining subject to Article 1831 of the Indonesian Civil Code.
Thus, legal action that can be taken by a creditor against the Personal Guarantor for the debtor’s debt can be carried out by filing a lawsuit for default or by applying for suspension of debt payment obligations & Bankruptcy. However, it is up to the interested parties as to which legal action to choose and proceed with. If a creditor wants legal action that is fast and can be proven in a simple way, then the creditor can choose legal action through Bankruptcy and Suspension of Debt Payment Obligations.
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