LEGAL ANALYSIS OF THE POWER OF EXECUTION OF WARRANTY (BORGTOCHT) THROUGH BANKRUPTCY LEGAL REMEDIES

Abstract

Borgtocht agreement or guarantee agreement is one form of credit security that aims to provide legal certainty for creditors. However, in practice, the implementation of borgtocht execution often faces obstacles when the main debtor or guarantor faces bankruptcy. This situation gives rise to a legal conflict between the creditor's rights to the borgtocht guarantee and the bankruptcy principle that prioritizes collective settlement for all creditors. This article analyzes the power of borgtocht execution through the bankruptcy legal mechanism in Indonesia by referring to the Civil Code and Law Number 37 of 2004 concerning Bankruptcy. Based on legal studies and case studies, this article provides recommendations to improve legal certainty in the implementation of borgtocht in the midst of the bankruptcy process.

This execution process becomes very important, especially when the debtor is unable to fulfill his obligations, because it provides a way for creditors to obtain fulfillment through collateral or third parties (guarantor). In addition, borgtocht execution is also closely related to bankruptcy procedures, which allow creditors to file claims on the collateral in order to obtain their rights. In the context of bankruptcy, borgtocht execution must be carried out by considering the principle of equality of rights between other Creditors, so as not to disrupt the process of dividing the assets of the bankrupt Debtor. Execution of borgtocht can be carried out through a more specific legal route, namely the bankruptcy procedure regulated in Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations (Bankruptcy Law). In the context of bankruptcy, creditors holding borgtocht can claim their rights through execution against the guarantor or collateralized assets, even though the debtor's bankruptcy process is ongoing. However, this execution process must pay attention to the applicable legal principles, including the pari passu principle which regulates equal treatment of all creditors in the distribution of assets of bankrupt debtors. This study aims to analyze the power of borgtocht execution in Indonesian law, as well as to identify the interaction between borgtocht execution and bankruptcy procedures regulated by law. A deeper understanding of the power of borgtocht execution is essential for creditors, debtors, and parties involved in the bankruptcy process, in order to ensure fair and balanced legal protection for all interested parties. Thus, this study contributes to the development of an understanding of creditors' rights in the execution of borgtocht guarantees within a broader legal framework.