Bankruptcy Petition

The bankruptcy petition is generally submitted by creditors who have receivables against the debtor, but such debtor may also apply for the bankruptcy of itself as stipulated in the Article 2 paragraph (1) of Law No. 37 of 2004 on The Bankruptcy and The Suspension of Obligation for Payment of Debts (Bankruptcy Act) that “ A debtor having two or more creditors and failing to pay at least one debt which has matured and became payable, shall be declared bankrupt through a Court decision, either at his own petition or at the request of one or more of his creditors."

Based on the Law No. 37 of 2004 concerning the Bankruptcy, the procedure of the bankruptcy petition are as follow:

1. A Petition for the declaration of bankruptcy shall be filed with the Court through the Chairman of the Court (Article 6 paragraph 2).
2. The Registrar shall submit the petition for a declaration of bankruptcy to the Chairman of the District Court at the latest within a time period of 2 (two) days counted from the date the petition is registered. At the latest within a time period of 3 (three) days counted from the date that the petition for a declaration of bankruptcy is registered, the Court shall study the application and set a date for a hearing.
3. The hearing on the petition for a declaration of bankruptcy shall be held at the latest within a time period of 20 (twenty) days counted from the date of the petition are registered (Article 6).
4. The Court shall be obligated to summon the Debtor, where a petition for a declaration of bankruptcy is filed by Creditor, Public Prosecutor, Bank of Indonesia, Capital Market Supervisory Board or Minister of Finance (Article 8).
5. The Court may summon the Creditor, where a petition for a declaration of bankruptcy is filed by the Debtor and there is doubt whether – the conditions to be declared bankrupt have been met (Article 8).
6. Such summons shall be made by the Court Bailiff by registered express mail no later than 7 (seven) days prior to holding the first hearing (Article 8 paragraph 2)
7. The decision on a petition for declaration of bankruptcy must be rendered at the latest within the time period of 60 (sixty) days counted from the date the petition for declaration of bankruptcy is registered. (Article 8 paragraph 5)
8. Decision concerning such petition for bankruptcy declaration shall contain complete legal considerations underlying the decision and must be pronounced in a public session and may be executed in advance, despite any legal actions are being taken against such decision (Article 8 paragraph 7)

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