Debt is an agreement between one party and another, typically involving money. In debt agreements, one party acts as the lender and the other as the borrower. Referring to Article 1754 of the Civil Code, debt agreements include loan agreements, in which one party provides a certain amount of goods to another party which depleted through use. On the condition that the other party (the debtor) will return an equivalent amount of the same kind and condition.
Debt agreements give rise to rights and obligations for the parties involved. The lender (commonly referred to as the creditor) is obligated to provide the loaned money to the borrower (commonly referred to as the debtor) after the debt agreement is established, while the debtor is obligated to repay the debt as agreed upon. Debt agreements are usually accompanied by collateral to ensure repayment by the debtor in case of default. However, in principle, there is no unsecured debt because all assets owned by the debtor automatically become collateral for their debts according to Article 1131 of the Civil Code:
“All movable and immovable property owned by the debtor, whether existing or to come into existence, shall be security for the individual obligations of the debtor.”
It should be noted that Article 1131 of the Civil Code cannot be interpreted to mean that when a debtor defaults, the creditor can automatically seize the debtor’s assets as a form of debt settlement. Instead, a court decision with the force of law is required as the basis for a creditor to seize the debtor’s assets. This ensures that the debtor’s rights are protected and prevents unlawful asset seizure by creditors.
So, what actions can debtors take if creditors forcibly seize their assets unlawfully?
- Filing a Police Report
Creditors who forcibly seize a debtor’s property can be charged with theft under Article 362 of the Criminal Code, which states:
“Anyone who takes any property, wholly or in part belonging to another, with the intention of unlawfully possessing it, shall be punished for theft, with imprisonment for up to five years or a fine of up to nine hundred rupiahs.”
Furthermore, if the creditor uses violence during the seizure, they can be charged under Article 365 paragraph (1) of the Criminal Code, which states:
“Anyone who is preceded, accompanied, or followed by violence or threats of violence against a person with the intention of preparing or facilitating theft, or in the event of being caught in the act, to enable themselves or others to escape, or to retain possession of the stolen property, shall be punished with imprisonment for up to nine years.”
- Filing a Lawsuit for Unlawful Acts
Unlawful acts are regulated under Article 1365 of the Civil Code:
“Any act that violates the law and causes harm to others obliges the person who causes the harm due to their fault to compensate for the damage.”
According to this provision, to file a lawsuit for unlawful acts against a creditor’s actions, it must meet the elements of Article 1365 of the Civil Code, namely:
- The existence of an act;
- The act is unlawful;
- Fault on the part of the perpetrator;
- Harm to the victim;
- A causal relationship between the act and the harm.
Legal expert Dr. Munir Fuady, S.H., M.H., LL.M. also expressed his views in the book “Unlawful Acts: Contemporary Approaches” (pages 58-61) that the unauthorized possession of another person’s property (conversion) in this case, the seizure of assets from a defaulting debtor unlawfully can be categorized as an Unlawful Act if it meets the following criteria:
- Action by the perpetrator;
- Intent (desire);
- Control/possession of another party’s property;
- The victim is the party authorized to control the property;
- Causal relationship;
- Without the victim’s consent.
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