3. Term

Debt can be categorized based on its term:

  • Short-term: Loans that must be repaid in a short time, generally less than one year.
  • Long-term: Loans that have a repayment period of more than one year.

4. Interest

Loans may be subject to interest, which is an additional cost on the loan. Interest can be calculated based on a percentage of the principal amount of the loan.

5. Risk

Debt has risks for both parties:

  • Debtor: The risk of default can result in fines, asset seizure, and reputational damage.
  • Creditor: The risk of default by the debtor can result in financial loss.

6. Settlement

Debt can be settled in various ways:

  • Full payment: The debtor repays the entire loan amount plus interest.
  • Partial payment: The debtor is only able to pay part of the loan amount.
  • Restructuring: The debt agreement is renegotiated to change the term, interest, or loan amount.
  • Debt write-off: The creditor waives its right to collect the debt.

The question then arises, can debt that is not paid off be reported as a criminal act? The answer is can and cannot.

Debt in the Realm of Civil Law

In general, debt falls within the realm of civil law.

This means that the settlement is carried out through civil law channels, such as:

  • Demand Letter: The lender sends a written warning to the borrower to collect the debt.
  • Mediation: Both parties attempt to resolve the issue peacefully with the help of a mediator.
  • Lawsuit to the Court: If mediation fails, the lender can file a lawsuit to the court to obtain a judge's decision requiring the borrower to pay the debt.