NON-PERFORMING LOANS AND UNILATED CONFISCATION BY LEASING COMPANIES LEGAL REVIEW OF DEBTORS' LEGAL PROTECTION IN FIDUCIARY AGREEMENTS

Abstract

Fiduciary agreement is one of the legal instruments widely used in consumer financing practices, especially in the motor vehicle purchase sector through a leasing scheme. In this system, the vehicle becomes the object of fiduciary collateral that remains in the control of the debtor, while the ownership rights are legally transferred to the creditor until the debt is paid off. Although this mechanism is legally valid and supported by Law Number 42 of 1999 concerning Fiduciary Collateral, in practice there are often deviations, especially in terms of execution of collateral by leasing companies when debtors experience bad credit. One of the most crucial forms of deviation is the act of unilateral confiscation or withdrawal of fiduciary objects without going through the proper legal process, often carried out without a fiduciary certificate and involving uncertified debt collectors.

This study aims to examine the provisions of Indonesian positive law governing the procedure for executing fiduciary guarantees in cases of bad debts and to evaluate the form of legal protection that can be provided to debtors against unilateral confiscation practices by leasing companies. Using a normative legal approach and qualitative analysis, this study analyzes related laws and regulations, including the Fiduciary Guarantee Law, the Consumer Protection Law, and a number of Constitutional Court Decisions such as Decision Number 18/PUU-XVII/2019, Number 2/PUU-XIX/2021, and Number 71/PUU-XIX/2021. The results of the study indicate that unilateral execution of fiduciary guarantees without a court order is contrary to the principle of due process of law and does not guarantee fair legal protection for debtors.

This study recommends the need for more consistent law enforcement, increased supervision of financing companies, and strengthening public legal literacy, so that debtors' rights can be effectively protected in fiduciary contracts. Comprehensive legal protection is not only important to maintain the balance of legal relations between debtors and creditors, but also to create a healthy, fair, and civilized national financing climate.