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Robert Sidauruk
Suspension of debt payment obligations (“SOP”) is an alternative offered under Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment (“Bankruptcy Law”) to settle non-performing loans. Despite being as old as bankruptcy proceedings although less popular, SOP provides an alternative approach for debtors to settle their “due” and “payable” debts, which are defined as any type of statutory or contractual obligations that can be monetized in a currency unit.
With last week’s Indonesian Law Digest (ILD) covering bankruptcy proceedings and providing an insight on what to expect when filing a bankruptcy declaration and the related procedures, readers will additionally benefit from knowing more about SOP. The approach of SOP differs in that it avoids liquidating the debtor’s assets by obliging a debtor to propose a composition plan before being declared bankrupt – opposite to bankruptcy proceedings. This mechanism allows a debtor to still run its business operations and earn profits and contemporaneously settle its debts.
For creditors, SOP proceedings still provide certainty for the repayment of a debt because the Bankruptcy Law includes time limitations for concluding an SOP proceeding, and further sets specific events under which debtors may be declared bankrupt without undergoing bankruptcy proceedings.
This week’s ILD will discuss SOP, covering its objectives, the parties involved, procedures, and legal remedies. It will also highlight the difference between SOP and bankruptcy proceedings, as well as the consequences to a debtor’s assets and asset management.
Suspension of debt payment obligations (“SOP”) is an alternative offered under Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment (“Bankruptcy Law”) to settle non-performing loans. Despite being as old as bankruptcy proceedings although less popular, SOP provides an alternative approach for debtors to settle their “due” and “payable” debts, which are defined as any type of statutory or contractual obligations that can be monetized in a currency unit.
With last week’s Indonesian Law Digest (ILD) covering bankruptcy proceedings and providing an insight on what to expect when filing a bankruptcy declaration and the related procedures, readers will additionally benefit from knowing more about SOP. The approach of SOP differs in that it avoids liquidating the debtor’s assets by obliging a debtor to propose a composition plan before being declared bankrupt – opposite to bankruptcy proceedings. This mechanism allows a debtor to still run its business operations and earn profits and contemporaneously settle its debts.
For creditors, SOP proceedings still provide certainty for the repayment of a debt because the Bankruptcy Law includes time limitations for concluding an SOP proceeding, and further sets specific events under which debtors may be declared bankrupt without undergoing bankruptcy proceedings.
This week’s ILD will discuss SOP, covering its objectives, the parties involved, procedures, and legal remedies. It will also highlight the difference between SOP and bankruptcy proceedings, as well as the consequences to a debtor’s assets and asset management.
Robert Sidauruk
Suspension of debt payment obligations (“SOP”) is an alternative offered under Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment (“Bankruptcy Law”) to settle non-performing loans. Despite being as old as bankruptcy proceedings although less popular, SOP provides an alternative approach for debtors to settle their “due” and “payable” debts, which are defined as any type of statutory or contractual obligations that can be monetized in a currency unit.
With last week’s Indonesian Law Digest (ILD) covering bankruptcy proceedings and providing an insight on what to expect when filing a bankruptcy declaration and the related procedures, readers will additionally benefit from knowing more about SOP. The approach of SOP differs in that it avoids liquidating the debtor’s assets by obliging a debtor to propose a composition plan before being declared bankrupt – opposite to bankruptcy proceedings. This mechanism allows a debtor to still run its business operations and earn profits and contemporaneously settle its debts.
For creditors, SOP proceedings still provide certainty for the repayment of a debt because the Bankruptcy Law includes time limitations for concluding an SOP proceeding, and further sets specific events under which debtors may be declared bankrupt without undergoing bankruptcy proceedings.
This week’s ILD will discuss SOP, covering its objectives, the parties involved, procedures, and legal remedies. It will also highlight the difference between SOP and bankruptcy proceedings, as well as the consequences to a debtor’s assets and asset management.
Suspension of debt payment obligations (“SOP”) is an alternative offered under Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment (“Bankruptcy Law”) to settle non-performing loans. Despite being as old as bankruptcy proceedings although less popular, SOP provides an alternative approach for debtors to settle their “due” and “payable” debts, which are defined as any type of statutory or contractual obligations that can be monetized in a currency unit.
With last week’s Indonesian Law Digest (ILD) covering bankruptcy proceedings and providing an insight on what to expect when filing a bankruptcy declaration and the related procedures, readers will additionally benefit from knowing more about SOP. The approach of SOP differs in that it avoids liquidating the debtor’s assets by obliging a debtor to propose a composition plan before being declared bankrupt – opposite to bankruptcy proceedings. This mechanism allows a debtor to still run its business operations and earn profits and contemporaneously settle its debts.
For creditors, SOP proceedings still provide certainty for the repayment of a debt because the Bankruptcy Law includes time limitations for concluding an SOP proceeding, and further sets specific events under which debtors may be declared bankrupt without undergoing bankruptcy proceedings.
This week’s ILD will discuss SOP, covering its objectives, the parties involved, procedures, and legal remedies. It will also highlight the difference between SOP and bankruptcy proceedings, as well as the consequences to a debtor’s assets and asset management.