Can a Debtor Be Criminalized? This is the Legal Explanation.

By Redaksi Literasi Hukum Indonesia

01 Mar 2026 09:56 WIB 01 March 2026 09:56 WIB 8 minutes reading time: 8 minutes 4 read

See the complete explanation of whether a person unable to pay debt can be criminalized or merely constitutes a breach of contract under Indonesian law.

Ilustrasi penjelasan hukum mengenai konsekuensi utang: pidana atau wanprestasi? (Source: AI Gemini, Redaksi Literasi Hukum Indonesia)

Question

I owned a small business which was forced to close down due to a lack of customers and deteriorating economic conditions. While it was still operating, I borrowed a sum of money from a friend for additional business capital, with a promise to repay it in monthly installments. However, due to my current severely deteriorated financial condition, I defaulted on the payment and am genuinely unable to repay it by the deadline.

My friend did not accept my situation. They continuously pressured me and ultimately threatened to report me to the police on charges of fraud and embezzlement, so that I would be imprisoned if I did not repay the debt by next week. I am very anxious and fearful. Can a person who is genuinely unable to repay a debt purely due to bankruptcy be criminally charged and imprisoned?

Brief Answer

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Legally, a person cannot be criminalized or imprisoned solely due to their inability to repay debt. Debt disputes absolutely fall within the scope of civil law, which regulates relationships and interests between individuals, not criminal law, which regulates crimes against public order. Failure to pay debt is categorized as a breach of contract or default, the sanctions for which are the fulfillment of obligations or civil compensation, not imprisonment.

Garis pembeda utama antara sengketa utang perdata dengan tindak pidana terletak pada ada tidaknya niat jahat (mens rea) sejak awal. Perkara utang perdata bisa berubah menjadi perkara pidana hanya apabila sejak awal terbukti terdapat perbuatan curang seperti pemakaian nama palsu, tipu muslihat, atau kebohongan (penipuan) sebagaimana diatur dalam Kitab Undang-Undang Hukum Pidana (KUHP) Nasional yang baru.

Kesimpulan praktisnya: Anda tidak perlu panik secara berlebihan. Jika Anda murni tidak bisa membayar karena kebangkrutan finansial, langkah terbaik adalah menunjukkan iktikad baik, bersikap kooperatif, memberikan bukti pembukuan usaha yang transparan, dan mengupayakan mediasi penyelesaian secara kekeluargaan.

Full Review

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Table of Contents

1. Differences between breach of contract and Criminal Offense According to Experts
2. When Can Debt Turn into a Criminal Offense?
4. What Can Be Done If Reported?
Legal Basis
Civil Law & Human Rights
Criminal Code (National Criminal Code - Law Number 1 of 2023)
Kesimpulan
FAQ (Pertanyaan yang Sering Diajukan)

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1. Differences between breach of contract and Criminal Offense According to Experts

To fully understand your legal position, we must refer to the definitions and distinctions between civil law (private law) and criminal law (public law) based on the views of experts.

Regarding civil law, according to Prof. Subekti in his book titled Fundamentals of Civil Law (2005), civil law in a broad sense encompasses all substantive private law, namely all fundamental laws that regulate individual interests. Similarly, according to C.S.T. Kansil in his work titled Principles of Civil Law (2008), civil law is a series of legal regulations governing relationships between individuals, with an emphasis on individual interests. Therefore, a pure debt-credit relationship is a civil contractual relationship between you and your friend.

In an agreement, if one party fails to fulfill its obligations, then this is referred to as breach of contract. According to Prof. Dr. Sudikno Mertokusumo in his book titled Indonesian Civil Procedure Law (Number 2006), breach of contract is the failure of one party to fulfill its obligations in accordance with the terms of the agreement. This is expressly regulated in Article 1238 of the Indonesian Civil Code, where the consequence of breach of contract is not imprisonment, but rather a civil obligation in the form of a requirement to pay compensation, interest, or asset execution.

On the other hand, the threat of imprisonment falls strictly within the realm of criminal law. According to Prof. Moeljatno in his book titled Principles of Criminal Law (Number 2008), criminal law is part of the entire body of law applicable in a country that establishes the foundations and regulates provisions concerning prohibited acts, accompanied by criminal sanctions for anyone who commits them. Criminal law imposes sanctions due to violations of public interest or malicious acts, not to punish an individual's financial failure in business. Furthermore, the prohibition against imprisoning someone for debt is also guaranteed by Human Rights.