SHS Web Conf.
Volume 54, 2018The 1st International Conference on Law, Governance and Social Justice (ICoL GaS 2018)
|Number of page(s)||5|
|Section||Business, Comercial and Corporate Law|
|Published online||14 November 2018|
Insolvency within Bankruptcy: The Case in Indonesia
Faculty of Law, Universitas Mulawarman, Samarinda, Indonesia
* Corresponding author: firstname.lastname@example.org
The Bankruptcy institutions are an extraordinary mechanism in debt settlement. The extraordinary characteristic distinguishes bankruptcy institutions with other mechanisms in debt settlement. This particular characteristic stems from the debtor’s inability to pay all of his debts due. However, two of the Indonesian bankruptcy laws do not include insolvency conditions as the basis for granting bankruptcy status to the debtor. Such legal politics resulted in the use of bankruptcy institutions deviated from their philosophy and vulnerable to abuse. With a post-positivist approach, this paper examines the position of insolvency tests on bankruptcy institutions, why insolvency tests are not carried out in Indonesian bankruptcy law, and how to place insolvency tests in Indonesian bankruptcy law. This study concludes that test insolvency is an essential element of bankruptcy institutions. Without insolvency tests, the bankruptcy institutions lose its raison d’etre. Proving that the debtor in insolvent condition cannot be done easily, so that Insolvency test is not used as a condition in granting bankruptcy status for debtors in Indonesia. Insolvency tests should serve as the basis for granting bankruptcy status to debtors by setting aside the principle of simple evidentiary systems. Thus, only by applying insolvency tests of bankruptcy institutions work properly.
© The Authors, published by EDP Sciences, 2018
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0 (http://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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