Legal Understanding of Collateral – In a joint agreement in business or borrowing money, there is a method that is carried out which results benefit both parties by the method of providing guarantees at the beginning of the transaction. This is done to anticipate the ability of the borrower if he cannot repay the loan, the collateral can be considered as repayment of the amount of money borrowed.
The legal concept of a guarantee (guarantee) includes the concept of material and individual guarantees. The Guarantee Law is essentially a regulation that regulates the legal relationship between the guarantor (debtor) and the guarantor (creditor) arising from the existence of a certain debt (credit) with a guarantee (certain goods or person).
In other words, the Guarantee Law does not only regulate creditor rights in relation to guarantees for repayment of certain debts, but also creditor rights and debtor rights in relation to guarantees related to the disbursement of certain rights.
The Guarantee Law is a legal provision that regulates the legal relationship between the guarantor (debtor) and the guarantor (creditor) arising from a certain debt (credit) with a guarantee (with a certain object or person). The Law on Guarantees does not only regulate the protection of creditors as debtors, but also regulates legal protection of guarantees for debtors as recipients of receivables.
However, from the brief explanation above, have you understood the meaning of the guarantee law well? So, if you haven’t been able to understand it well, then in this discussion we have summarized various information related to guarantee law which can be additional insight for all of you Readers.
You can see further discussion regarding the meaning of guarantee law below!
Definition of Guarantee Law
Warranty or in (Indonesian: Guarantee) are goods or assets of the borrower (debtor) that are guaranteed or entrusted to the lender (creditor) as collateral or as collateral for the loan received if the borrower cannot repay the loan or obligations that must be fulfilled by the borrower .
If the borrower cannot fulfill its obligations or is in default, the lender can take collateral based on the agreement. In credit control, guarantees are often an important factor to improve the creditworthiness of individuals or companies. Even with a mortgage contract, collateral is the only factor considered when determining the loan amount.
Many experts define this guarantee correctly. According to Thesis Hukum.com, according to J Satrio, guarantee law is a law that regulates guaranteeing creditors’ receivables to debtors. In Satria’s definition, it only focuses on regulating creditors’ rights, but does not pay attention to debtors’ rights.
According to Prof. M. Ali Mansyur, Guarantee Law is a regulation that regulates the legal relationship between creditors and debtors in relation to providing guarantees when credit is given. Meanwhile, according to Sri Soedewi, Masjchoen Sofwan said that the Guarantee Law is a law that regulates legal constructions that allow the granting of credit guarantees for goods purchased as collateral.
So, the meaning of the Guarantee Law is essentially a provision that regulates the relationship between the guarantor (debtor) and the guarantor (creditor) as a result of an assessment of a certain debt (credit) with a guarantee (a certain object or person).
In the following, the warranty law is defined based on various expert opinions
1. Sri Soedewi Masjchoen Sofwan
Sri Soedewi Masjchoen Sofwan said, the Guarantee Law is a law that regulates legal construction that allows the granting of credit facilities by guaranteeing the goods purchased as collateral.
2. J. Satrio
The Guarantee Law is a law that regulates guaranteeing creditors’ receivables to debtors. In Satria’s definition, it only focuses on regulating creditors’ rights, but does not pay attention to debtors’ rights.
3. Salim HS
The Law on Guarantees is the entire legal standard that regulates the legal relationship between the guarantor and the recipient of the guarantee in connection with the provision of guarantees in order to obtain a line of credit.
4. M. Ali Mansur
The Law on Guarantees is the law that regulates the legal relationship between creditors and debtors at the time of ordering collateral for granting credit.
From the description above, it can be concluded that the Guarantee Law is a law that regulates the legal relationship between the guarantor and the guarantor of collateral as collateral.
Guarantee Legal Principles
This is the principle on which warranty law is based. On the basis of guarantee law:
1. The Principle of Publicity
The purpose of this principle is to guide that all rights and obligations must be registered in such a way that a third party knows what is being charged.
Pawn registration is carried out at the State/City Land Agency office, trust registration is carried out at the Trust Registration Office of the Ministry of Law and Human Rights while sea mortgage registration is carried out in front of the office. Transfer Registration and Registrar Officer, namely Syahbandar
2. The Principle of Specificity
Liens, deposits and pledges can only be imposed on parcels or goods registered in the name of a certain person, which must be clear, detailed and detailed.
3. The principle cannot be divided
The principle of sharing debt cannot result in the mortgage, safekeeping, mortgage and maintenance rights being divided even though partial payments have been made (the securities must have an entity that guarantees the debt).
4. The Principle of Invalidity
Therefore the guarantee must be in the hands of the guarantor (guarantor). This is done so that the collateral can be owned while the loan has not been repaid.
5. Horizontal Principle
Building and land are not one unit. This is reflected in the use of tenure and income, both in government and private cultivation. Therefore, buildings and land parcels are not one unit.
This is reflected in the use of tenure and income, both in government and private cultivation. The building belongs to the guarantor, but the land belongs to someone else, based on usufructuary rights and income it can be used as collateral, but in practice the bank does not want to accept this principle, because if there is negligence, you will face difficulties.
Types of Loan Law
Whether all goods can be used as collateral for debt depends on which guarantee institution is used to guarantee the goods.
1. General Warranty (Guarantee).
According to Article 1131 of the Indonesian Civil Code (“KUHPer”), all debtors’ existing and future assets, both movable and immovable, are included in all individual debts. This is called a guarantee or general warranty.
2. Special Warranty (Guarantee).
The Guarantee Law contains articles that regulate goods that are used as collateral for debt or are referred to as physical guarantees. An in-kind guarantee is a guarantee whose subject is movable or immovable property specifically intended to guarantee the debtor’s debt to the creditor if the debtor cannot pay his debt to the creditor in the future.
Type of Material Guarantee
The following are various types of material guarantees cited by the Gramedia blog including:
In general, a pawnshop is a guarantee of assets to certain parties to obtain a certain amount of money and goods, which are guaranteed to be redeemed according to an agreement between the customer and the pawnshop.
Pledge is movable property consisting of tangible goods such as jewelry and intangible goods such as the right to receive money (orders). If the debtor cannot pay off the loan, then the assets charged belong to the creditor. According to articles 1155 and 1156 BGB, custody can be enforced in two ways, namely by direct enforcement and only by court order.
Pledge is a right obtained by a person who owes the debtor, or other movable or immovable goods (motorcycles, cars, rice fields, houses) submitted in his name, and the person who owes the debt has the right to pay back the goods in priority to other creditors; does not include the auction cost of the item. Where a person has to pawn his goods to get money.
2. Fiduciary (Trustee)
Fiduciary is the transfer of ownership rights to an object which is kept secret, provided that the object being transferred remains in the control of the owner of the object. Fiduciary is regulated by the Fiduciary Guarantee Law no. 42 of 1999. Fiduciary objects are movable objects, both tangible and intangible, as well as immovable objects, especially buildings, which are regulated in Law Number 4 of 1996 concerning mortgage rights.
A lien is a real right to immovable property that serves as security for the performance of the contract. The subject of the mortgage is a ship with a volume of 20 m3. This is in Article 1162 of the Civil Code, Article 1232 of the Civil Code and Law no. 17 of 2008 concerning concessional mortgages and delivery requirements based on Chapter IV Sea Transportation.
What if the debtor does not fulfill his obligations? According to Article 1178 (2) BGB regarding the implementation of mortgages, the creditor, as the owner of the ship mortgage, has the right to a public auction in the event that the debtor does not pay (default). mortgaged ship. Funds obtained from the sale of the ship will be used to pay off the debtor’s obligations.
Law Regarding Guarantee Law
Although the law does not provide a definition of legal guarantees, there are laws in the Civil Code that regulate guarantees in general. Namely article 1131 and article 1132 of the Civil Code. Section 1131 of the Civil Code states:
“All existing and future debtor’s movable and immovable property are collateral for the debtor’s individual contract.” Therefore, based on this article, all of a person’s assets automatically become collateral for debt.
And Article 1132 of the Civil Code says that the goods are joint guarantees for all creditors against them, the proceeds from the sale of these goods are divided according to the proportion of each debt, unless there are good reasons to take precedence among the creditors.
Nature of Warranty Law
A guarantee contract cannot stand alone unless it is preceded by a certain term contract or a main contract. Therefore, the warranty provisions are accessory, complementary, or extended. Since no one can guarantee a debt if there is no collateral, guarantee contracts are made after the main contract is completed.
With the end of the main contract, the guarantee contract also ends, because no one wants to guarantee the debt if there is no guarantee as a loan medium.
Procedures for securing or pledging property
Applying for a collateral loan is quite easy, because if the requirements are met, the loan application will be approved by the bank with certainty. But it is important to remember that property is a valuable asset that must be preserved. However, if you have to mortgage the property in the form of a house certificate, only pay as much as necessary so that your mortgage burden doesn’t become excessive. You must record the following procedures and facts in the Guaranty Act:
Choose a trusted bank or financial institution that is registered and regulated by the Finnish Financial Supervisory Authority (OJK). This is important to protect your wealth. Find out also about the interest that must be calculated every year and the term of the loan or the length of the loan payment, so you can calculate your monthly ability to pay loan payments. Find out about the requirements for your credit goals.
Some of these requirements are::
- Borrowers who can apply for loans are Indonesian citizens
- Age 21-65 years
- Work as an employee, contractor and freelancer
- Minimum income per month IDR 4 million
- Required documents
- Employee Certificate
- Payments for the last 3 months
- Photocopy of identity card]
- Copy of Family Card
- Copy of marriage certificate (if married) or divorce certificate
- Photocopy of Taxpayer Identification Number
- Photocopy of the most recent land and building tax
- Copy of savings account for the last 3 months
- Photocopy of Property Right Certificate , Building Use Right Certificate and Building Construction Permit
- Home Certificate
After the documents required by the Guarantee Law are filled out and sent to the bank, the bank will verify the information. After that the bank conducted a survey to the location of the house to assess the ownership of the house. You will also be asked about your plans for using the loan and your work. If your loan application is approved, you will receive the necessary funds. However, you should ask yourself from the start what is the maximum loan amount a bank can offer.
Because according to the Law on Guarantees, banks usually provide a maximum loan of 70-80% of the price of the apartment. If possible, you don’t need to withdraw the maximum amount of money, so paying out is easier.
Make a binding commitment to pay loan payments in accordance with the agreement made under the Guarantee Law. Now that you understand condo laws and insurance procedures, you know that your valuable assets can help you raise additional funds. Before you decide to change the status of your assets, know the meaning of each warranty law and the correct warranty procedures.
That’s all for a brief discussion of the definition of guarantee law. The discussion this time does not only discuss the definition of guarantee law, but also discusses further about the principles, types, laws, nature, and procedures of these guarantees, which you can see well.
Understanding the meaning of collateral law gives us additional knowledge about the various legal procedures that apply in carrying out transactions for borrowing a sum of money either individually, through a pawnshop, or the bank you are going to make the loan. And, with a clear method and legal basis for this guarantee, it also guarantees that money lenders will receive guarantees for the money they provide.