Legal Literacy - This article discusses in depth about fiduciary as a form of guarantee on movable objects according to Law Number 42 of 1999, covering the legal basis, objects and subjects of the guarantee, registration, execution, and implications of the Constitutional Court Decision Number 18/PUU-XVII/2019 in business practices as well as solutions to overcome obstacles that arise in the implementation of fiduciary guarantee execution.

Introduction

Fiduciary is one form of guarantee recognized in Article 1 paragraph (2) Law Number 42 of 1999 concerning Fiduciary Guarantees, where fiduciary is used as a guarantee right over movable objects. Fiduciary is one of the most common forms of guarantee used in financial transactions, especially in sale and purchase agreements. In a fiduciary agreement, the debtor hands over movable objects to the creditor as collateral so that the creditor can ensure repayment of the credit if the debtor cannot repay the credit. Fiduciary guarantees can be guaranteed to exist and can be used as collateral for credit repayment.

Fiduciary has several characteristics, namely: 1) Fiduciary is a guarantee right granted by the debtor to the creditor; and 2) Fiduciary can only be granted to movable objects. In Dutch terminology, the term fiduciary is often referred to in full as Fiduciare Eigendom Overdracht (FEO), which has the meaning of transferring ownership in trust, while in English, it is called Fiduciary Ownership Transfer. In Law Number 42 of 1999 concerning Fiduciary Guarantees, there are parties involved in fiduciary, namely the fiduciary giver and the fiduciary recipient. The fiduciary giver is the party that gives the fiduciary, while the fiduciary recipient is the party that receives the fiduciary. Fiduciary can provide benefits for both lenders and borrowers.

According to Law Number 42 of 1999 concerning fiduciary, fiduciary is the right of ownership of an object based on trust with the provision that the object whose ownership rights are transferred remains in the possession of the owner of the object. In a fiduciary agreement, the object used as collateral is the goods that are the object of the credit agreement. If a default occurs, such as the debtor's inability to pay credit installments or repay the credit, or a transfer of the collateral object occurs under the table, the fiduciary agreement provides protection to the lender to receive the payments they should receive. The fiduciary agreement also gives the lender the power of executorial rights to revoke the fiduciary object without going through a court agreement if the debtor violates the agreement.