– What is a debtor? According to the Big Indonesian Dictionary (KBBI), a debtor is a person or institution that owes money to another person or institution. In most cases, the debtor must pay interest on the debt along with the principal. The debtor is generally known as the borrower, but when the company's debt is in the form of securities it is called the issuer. In more detail about what a debtor is, see in the following review!

  • What is a Debtor?
  • Debtor Protection Law
  • Types of Debtors
  • Debtor Example
  • The difference between debtors and creditors

What is a Debtor?

What is a debtor? A debtor is a person or entity that owes money to another person, which can be an individual or an institution (including the government). The relationship between the debtor and the creditor is very close, considering that the creditor is the party (individual, organization, company or government) that gives the loan to the debtor. For example, 'A' borrows money from a bank. A is the debtor, and the bank is the creditor. But, if 'A' keeps money in the bank, then A is the creditor, and the bank here is the debtor.

As a debtor, there are rights that must be fulfilled including:

  • Obtain information about loan products and/or services
  • accurate, honest, clear and not misleading
  • Get the latest information that is easily accessible.
  • Get an explanation if the reason for the application for financing is rejected
  • Get an explanation of consumer rights and obligations
  • Get an explanation of the costs that may arise
  • Get the opportunity to choose if a loan product is offered in package form

Debtor Protection Law

In entering into an agreement, it is possible for the debtor to commit an act of default which may harm the creditor. Therefore, in problems between creditors and debtors who enter into a standard agreement, it is necessary to have preventive legal protection facilities. The debtor must be given the opportunity to submit an objection if the clause contained in the standard agreement is detrimental to the debtor.

Legal protection for debtors is stated in Law Number 8 of 1999 concerning Consumer Protection. If in the most common cases such as the debtor tripping over bad credit, then efforts for resolution can be taken in two ways, namely litigation through the courts, and non-litigation efforts through preventive measures, namely actions to anticipate the emergence of bad credit, early warning , and negotiation efforts. .

The obstacles that occur in efforts to deal with bad credit due to default debtors, include normative obstacles or obstacles that are contrary to applicable laws, internal obstacles that arise from problems within the institution concerned, as well as external obstacles, namely obstacles that come from the debtor.

Well , now you know what a debtor is. If you want to buy a house with a credit system, you will be referred to as a debtor, namely the borrower. Here's a list of residences in the Citayam area, Depok under IDR 400 million here!

Types of Debtors

Despite receiving legal protection regulated in the law, a good debtor must still have responsibilities starting from self-awareness. That is, in taking on debt, the debtor must know the amount he has and what he needs. It is better for a debtor not to submit unnecessary debts.

In addition, be a debtor who is responsible enough to pay debts in a disciplined manner. Moreover, timely payment of debt along with interest will avoid potential problems in the future. Apart from being trusted by creditors, paying debts on time will also ensure that it is easier to get a loan at a later time. It should be noted, according to the Economic Times, debtors are divided into two types, namely:

  1. Short Term Debtors: When debts are given for a short term (less than one year), the debtor is referred to as short term. This type of debt is recorded under short-term receivables under current assets on the balance sheet.
  2. Long Term Debtors: When debts are given for the long term (more than one year), the debtor is known for the long term. This debt is recorded in long-term receivables under long-term assets on the balance sheet.

Debtor Example

According to the previous explanation, what is a debtor? Debtors are people who have debts due to agreements or laws whose repayment can be billed before the court. Based on the conditions in the field, besides the type, debtors are also categorized into three examples. Anything?

  1. Recipients of Loans from Individuals/Entities/Institutions

The most common example of a debtor is a person who receives a loan in the form of money from another party. Whether it's an individual, agency, or institution. The terms of this loan were agreed upon by both parties, starting from the percentage of interest or whether there is collateral.

  1. Recipient of Bank Loans

A person or entity that borrows funds from a bank is called a debtor. Referring to Law Number 10 of 1998 concerning Amendments to Law Number 7 of 1992 concerning Banking it is stated that "Debtor Customers are customers who obtain credit or financing facilities based on Sharia Principles or equivalent based on a bank agreement with the customer concerned."

  1. Recipient of Goods Credit

In addition to funds, goods are also included in objects that can be lent by the debtor by credit or installments. The legal basis for buying and selling in installments is the legal provisions of the agreement ( Verbintenissen Rechts ). So, the parties who carry out legal actions of buying and selling with installment payments can make an agreement based on the agreement. This installment sale and purchase agreement is included in the anonymous agreement ( In Nominat ) because the installment sale and purchase agreement is not regulated in the Civil Code.

The difference between debtors and creditors

What is meant by a creditor and what is the difference with what is a debtor? Creditors are people or entities or institutions that provide credit or loans to other parties. The terminology for credit is often associated with and used in the financial world, especially for loans that have short tenors and long-term bonds.

While the debtor is a party owed to another party, usually by receiving something from the other party (creditor) promised by the debtor to pay back at the agreed time. The lending itself generally requires a guarantee or collateral from the debtor.