How to File a PKPU Petition in Indonesia: A Legal Guide

Facing mounting debts or unpaid invoices from a debtor? Or perhaps your company is overwhelmed with liabilities it cannot repay in time? In Indonesia, a powerful legal tool exists to provide breathing space for restructuring debt: PKPU (Penundaan Kewajiban Pembayaran Utang), or Debt Payment Suspension. This mechanism is designed to allow debtors and creditors to reach a fair settlement through Indonesian Commercial Court.

This guide explains a walkthrough of how to file a PKPU petition in Indonesia, ensuring that whether you are a creditor or debtor, you’re equipped with the legal knowledge to protect your interests.

Key Takeaways

• PKPU is a legal mechanism in Indonesia to suspend debt payments and restructure obligations before bankruptcy.
• Both creditors and debtors can file a PKPU petition through the Commercial Court with specific legal requirements.
• The PKPU process includes court hearings, creditor verification, and restructuring plan negotiations under court supervision.
• If no agreement is reached, the debtor may face bankruptcy; hence legal representation is critical.
• Kusuma & Partners Law Firm provides expert legal guidance and representation throughout the PKPU process.

Legal Basis of PKPU (Suspension of Debt Payment) Proceedings

PKPU proceedings are governed under Law No. 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations (Bankruptcy Law). This law provides the legal framework for:

• Who can file a petition
• The structure of proceedings
• Rights and obligations of parties involved
• Legal consequences of PKPU outcomes

Additionally, the Indonesian Commercial Court (Pengadilan Niaga) has exclusive jurisdiction to hear PKPU matters.

Who Can File a PKPU Petition?

Both creditors and debtors have the right to initiate a PKPU petition. Here’s how:

• Creditors: Must prove that the debtor has at least two debts, one of which is due and unpaid.
• Debtors: May proactively seek court protection to reorganize their liabilities before creditors push for bankruptcy.

The ability for either party to initiate adds flexibility and fairness to the process, allowing mutual debt settlements without hostile action.

READ MORE:

• The Differences Between PKPU and Bankruptcy in Indonesia

Types of PKPU: Temporary and Permanent

PKPU comes in two forms:

1. Temporary PKPU (PKPU Sementara)
   • Valid for up to 45 days.
   • Typically used to negotiate debt restructuring proposals with creditors.
2. Permanent PKPU (PKPU Tetap)
   • Can last up to 270 days (including extensions).
   • Granted if initial negotiations show promise but need more time.

A temporary PKPU may be extended into a permanent one by court approval if the debtor shows serious intent and creditors are receptive.

Requirements for Filing a PKPU Petition

Before filing a PKPU petition in Indonesia, ensure that the following criteria are met:

• The debtor has at least two creditors.
• One or more of the debts must be due and payable and can be simply proven.
• The application must be filed with the Commercial Court where the debtor is domiciled.
• Accompanied by evidence such as invoices, loan agreements, or default letters.

Failure to meet these requirements may result in immediate rejection of the petition.

Process: How to File a PKPU Petition in Indonesia

1. Understanding the Role of the Commercial Court

The petition is submitted to the Commercial Court, which is a special division within the District Court that handles insolvency and commercial disputes.

2. Required Documents and Submission Format

The PKPU application should include:

• Formal petition letter.
• Evidence of debts (at least two creditors).
• Identity documents of the petitioner.
• Supporting contracts, invoices, or correspondence.
• Power of attorney (shall be represented by an Indonesian lawyer).

3. Initial Court Hearing and Debtor’s Response

Once the petition is filed:

1. The court schedules a preliminary hearing (usually within 3 days).
2. The debtor may respond or contest the claim.
3. The court reviews whether the debtor meets the insolvency threshold.

If accepted, a temporary PKPU is granted.

The Role of Supervisory Judge and Administrator Team (Tim Pengurus)

The court will appoint:

• A Supervisory Judge (Hakim Pengawas) to oversee the process.
• An Administrator Team (Tim Pengurus), who assists in verifying creditor claims and facilitates negotiation between parties.

These roles are vital in maintaining impartiality and legal order throughout the process.

READ MORE:

• PKPU in Indonesia: A Legal Guide for Debtors

Timeline and Key Milestones in a PKPU Case

Here’s a rough timeline:

• Day 1–3: Petition submitted; court schedules initial hearing.
• Day 4–7: Hearing and issuance of temporary PKPU.
• Day 8–45: Creditor verification and meeting.
• Day 45+: If agreed, extension to permanent PKPU.
• Max 270 days: Deadline to reach an agreement, or risk bankruptcy ruling.

What Happens After PKPU is Granted?

Once the court approves a PKPU, the parties must comply with its terms.

• All debt enforcement is temporarily halted.
• The debtor must submit a restructuring plan to the creditors and the parties must negotiate.
• Creditors vote to accept or reject the proposal.
• If approved, the plan becomes binding.
• If the court rejects the petition, it may declare the debtor bankrupt

Thus, the outcome hinges on good faith negotiation and transparency.

Risks and Legal Consequences for Debtors and Creditors

For debtors, a failed PKPU could lead to:

• Bankruptcy declaration
• Asset liquidation
• Loss of business reputation

For creditors, risks include:

• Delayed repayments
• Reduced recovery (in restructuring plans)
• Competing claims from other creditors

Your legal representative defends your interests throughout the process.

Strategies for Creditors During PKPU Process

Creditors should:

• Actively participate in creditor meetings.
• Verify their claims accurately.
• Review and negotiate the restructuring plan carefully.
• Consider forming a creditor committee for collective bargaining.

Having strategic legal support enhances leverage and protection.

Alternative to PKPU: When to Consider Bankruptcy

If a debtor has no genuine intent to restructure or is clearly insolvent, filing for bankruptcy may be more appropriate than initiating or agreeing to PKPU.

The decision should depend on:

• Financial transparency of the debtor
• Risk of further loss
• Feasibility of recovery via restructuring

READ MORE:

• Debt Collection in Indonesia: Legal Strategies & Best Practices

Practical Commentary from Kusuma & Partners

In our experience, early legal intervention is critical in PKPU matters. Many clients approach us too late—when the company is already at the brink of collapse or after creditors have begun collection actions.

At Kusuma & Partners, we advise companies and creditors to:

• Monitor signs of financial distress early.
• Engage in legal consultation before filing or responding to PKPU.
• Use PKPU strategically as a tool for survival, not delay.

With experiences handling high-profile PKPU cases, our team ensures clients navigate this complex legal terrain with clarity and confidence.

Conclusion

Filing a PKPU Petition in Indonesia is more than just a procedural manual—it’s a roadmap for businesses, creditors, and stakeholders facing serious financial challenges. Whether you are trying to save your business or secure repayment from a distressed debtor, understanding and executing PKPU correctly can make the difference between resolution and ruin.

How We Can Help

Facing financial disputes or unpaid debts? Need to file or defend against a PKPU petition? Our experienced legal team will assess your situation, prepare the right strategy, and represent your best interests in court. Reach out today for a consultation.

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“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”