Legal Literacy - Non-performing unsecured loans? Understand how to handle and execute them according to the Indonesian Civil Code

National Development and the Role of Banking

Sustainable national development to realize a just and prosperous society based on Pancasila and the 1945 Constitution requires harmony, alignment, and balance in the Trilogy of Development. In this context, economic development is closely related to the business activities of citizens, including small and medium enterprises (SMEs). Banking plays an important role in providing credit to support these businesses.

Unsecured Loans and Payment Obstacles

Unsecured loans are an attractive alternative for debtors, but the payment process is not always smooth. Banks experience obstacles and hindrances in the payment process of unsecured loans, which are caused by various factors. Therefore, effective handling of non-performing unsecured loans is necessary.

Legal Basis for Non-Performing Loan Execution

The execution of non-performing loans against unsecured loan agreements in banking is regulated in articles 1131 and 1132 of the Indonesian Civil Code. Article 1131 states that all debts, whether movable or immovable, existing or new, must be borne by the owner.

Article 1132 explains that all of the debtor's assets can be pledged by all persons responsible for the assets (creditors). The…