Fiduciary Security and Non-Performing Loan Collection Practices by Financing Companies in Indonesia
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Abstract
This study analyzes fiduciary security practices in motor vehicle financing and examines the implementation and implications of Constitutional Court Decision Number 18/PUU-XVII/2019 on fiduciary security execution mechanisms. The research employs a normative juridical approach with analytical descriptive specifications. The findings reveal that financing companies play a significant role in providing funds with consumer eligibility assessment and security agreements as protective instruments. The use of debt collectors in non-performing loan collection is regulated through OJK regulations requiring complete documentation and prohibiting intimidation or threats. Constitutional Court Decision Number 18/PUU-XVII/2019 fundamentally altered fiduciary security execution by eliminating the executorial title concept, affirming that execution can only proceed when default is based on explicit agreement between debtor and creditor. Consequently, fiduciary security execution now requires court involvement through application, judicial decision, seizure, and auction. Implementation challenges include failure to register fiduciary objects, unfavorable negotiations, and insufficient legal education. The study concludes that regulatory strengthening, enhanced legal education, and legislative revision following the Constitutional Court decision are essential to ensure balanced legal protection for both creditors and debtors in fiduciary security practices.
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