LEGAL STATUS OF THE GUARANTOR IN BANKRUPTCY

In the case of a personal guaranty or borgtoch, the principle of a permanent guarantor (guarantor always guarantor) must be upheld for the payment of the principal’s debt if the principal does not pay or is unable to pay the debt to the creditor. Therefore, the principal’s civil status cannot be transferred to a guarantor outside of demands for payment of the principal’s debt. The logical consequence of this principle is that the guarantor cannot be asked for bankruptcy or default by the principal. What can be demanded from the guarantor is repayment of the principal’s debt, either jointly with the principal or against the guarantor.

“The principal’s civil status can be transferred to the guarantor outside of demands for payment of a debt because the guarantor is forever the guarantor for the debt of the principal who is unable to pay the debt, so the guarantor cannot be asked for bankruptcy, all that can be demanded is debt repayment.”

→ Supreme Court Decision No. 922 K/Pdt/1995 dated 31 October 1997.

Source:

Indonesian Supreme Court Jurisprudence Book Year 1998, pages 140 and 141.

Best regards,

Fredrik J. Pinakunary