What is the typical settlement of debt collection?

Typically, the debtor will pay the debt fully; or enter into a debt agreement that contains the installment of payment by giving an asset guarantee.

How can I enforce a debt agreement?

If the debtor fails to comply with an agreed settlement, legal enforcement measures such as executing the debtor’s asset and court proceedings are conducted.

How does the debt collection process work in Indonesia?

The process is started with legal advice and case analysis by our lawyers, sending demand letters, followed by negotiation and settlement. If the debtor remains unresponsive or refuses to pay, further legal actions like filing a lawsuit through the Indonesian court may be considered if necessary.

How many demand letters shall be sent to the debtor?

In Indonesia, the best legal practice is to send 2x (twice), or a maximum of 3x (three times) demand letters.

What happens if the debtor ignores the first demand letter?

The next steps could include sending the second demand letter and further negotiations. Persistent non-compliance may lead to further legal action or court proceedings.

How long does the debt collection process take?

Depending on the complexity of the case and the debtor’s response.

What are the benefits of out-of-court debt collection?

Typically, faster, less expensive, and less adversarial than going to court. It helps maintain business relationships and avoids lengthy legal battles in court.

Are there any time limits for claiming an unpaid debt in Indonesia?

Yes, there is a statute of limitations, which is the period from the due date of the debt in which you must initiate recovery actions for the debtor.

Can debt collection affect my business relationship?

Handled professionally, debt collection can maintain or even strengthen business relationships by demonstrating a commitment to fair and timely financial practices. Open communication and a fair approach are key.

What if the debtor disputes the debt?

If the debtor disputes the debt, you may need to provide evidence supporting your claim. This could involve negotiations, mediation, or legal action to resolve the dispute.

Can I include interest on overdue debts?

Yes. The interest rate should comply with Indonesian laws.

What should I do if I receive a counterclaim from the debtor?

It is important to consult with our lawyer to assess the validity and implications of the counterclaim. Our lawyer can help you respond appropriately and protect your interests.