Legal Power of Execution of Debt Recognition Deed Guarantee

Oct 13, 2025 by talynt.org 74 views

Legal Strength of Execution of Debt Recognition Deed of Credit Agreement: A Research Study at PT. Bank Mandiri Branch Office of Matang Geulumpang Branch of Bireuen Aceh Regency

Introduction

In the world of banking, credit agreements are a common practice that involves a debtor and a creditor. One of the essential documents in this agreement is the Debt Recognition Deed, which serves as a formal proof of the debtor's obligation to the bank. This document has a unique characteristic, as it has executorial strength similar to a judge's decision. This means that if the debtor defaults on their obligations, the bank can immediately submit an application for execution to the court to take over the agreed guarantee. However, a recent study conducted at PT. Bank Mandiri Branch Office of Matang Geulumpang Dua Bireuen Aceh revealed an interesting fact. Despite having the right to execute guarantees, the bank actually chose to make a statement of willingness to release the right to collateral. This letter was signed by the debtor, as if giving the freedom to the debtor to keep holding a guarantee.

Background of the Study

The study used a normative juridical method with a descriptive-analytical approach to investigate the legal strength of execution of the Debt Recognition Deed in a credit agreement. The data collected included secondary data from literature and primary data obtained from field observations. The study aimed to explore the legal power of execution of the Debt Recognition Deed guarantee, the debtor's loss of right to guarantee, and the creditors' legal efforts in executing the guarantee.

Legal Power of Execution of Debt Recognition Deed Guarantee

The study revealed that the Grosse Deed, which is the legalized Debt Recognition Deed, has legal force equivalent to the judge's decision. This means that the bank has the right to immediately submit the execution of the guarantee if the debtor is default. The bank's right to execute the guarantee is a powerful tool that can be used to recover debts from defaulting debtors.

Debtor's Loss of Right to Guarantee

The study also found that the debtor loses the right to guarantee that has been guaranteed in the Debt Recognition Deed. This means that the debtor is no longer entitled to the benefits of the guarantee, and the bank can take possession of the collateral. However, the debtor is still required to pay off debts to the bank even though it has lost the right to guarantee.

Creditors' Legal Efforts

The study revealed that creditors, in this case, the bank, tend to use a negotiation approach with debtors rather than directly executing the guarantee. This approach is often referred to as credit rescue. The bank chooses to save credit by providing an opportunity for the debtor to pay off its debt, despite having the right to execute. This approach is often used to minimize the risk of loss for the bank and to increase the effectiveness of the billing process.

Suggestion

Based on the results of the study, the authors suggest that creditors, such as banks, should be more assertive in carrying out the execution rights they have. The bank can utilize the Grosse legal force of the deed as a strong foundation for direct execution during debtors of default. This can minimize the risk of loss for banks and increase the effectiveness of the billing process.

Conclusion

This research opens a new perspective on the application of law in the banking world. The existence of the Debt Recognition Deed with its executoring power gives a strong legal weapon to the bank. However, practice in the field shows that banks sometimes prefer the negotiation and credit rescue approach, despite having execution rights. The study highlights the importance of understanding the legal strength of execution of the Debt Recognition Deed in a credit agreement and the need for creditors to be more assertive in carrying out their execution rights.

Recommendation

The study recommends that creditors, such as banks, should:

Utilize the Grosse legal force of the deed as a strong foundation for direct execution during debtors of default.
Be more assertive in carrying out the execution rights they have.
Minimize the risk of loss for banks and increase the effectiveness of the billing process.

Limitation of the Study

The study has several limitations, including:

The study was conducted at a single bank branch, which may not be representative of other banks.
The study only investigated the legal strength of execution of the Debt Recognition Deed in a credit agreement and did not explore other aspects of the agreement.

Future Research

Future research should investigate the following:

The impact of the Debt Recognition Deed on the banking industry.
The effectiveness of the negotiation and credit rescue approach in recovering debts from defaulting debtors.
The role of the bank's internal policies and procedures in executing the guarantee.

References

[List of references cited in the study]

Appendices

[Appendices, including tables, figures, and additional data]

By understanding the legal strength of execution of the Debt Recognition Deed in a credit agreement, creditors, such as banks, can better navigate the complexities of debt recovery and minimize the risk of loss. This study provides valuable insights into the application of law in the banking world and highlights the need for creditors to be more assertive in carrying out their execution rights.
Frequently Asked Questions (FAQs) about the Legal Strength of Execution of Debt Recognition Deed in a Credit Agreement

Q: What is a Debt Recognition Deed?

A: A Debt Recognition Deed is a formal document that serves as proof of a debtor's obligation to a creditor. It is a crucial component of a credit agreement and has executorial strength similar to a judge's decision.

Q: What is the executorial strength of a Debt Recognition Deed?

A: The executorial strength of a Debt Recognition Deed means that if the debtor defaults on their obligations, the creditor can immediately submit an application for execution to the court to take over the agreed guarantee.

Q: What happens if the debtor loses the right to guarantee?

A: If the debtor loses the right to guarantee, they are no longer entitled to the benefits of the guarantee, and the creditor can take possession of the collateral. However, the debtor is still required to pay off debts to the creditor.

Q: Why do creditors sometimes choose to use a negotiation approach rather than directly executing the guarantee?

A: Creditors may choose to use a negotiation approach to minimize the risk of loss and to increase the effectiveness of the billing process. This approach is often referred to as credit rescue.

Q: What is credit rescue?

A: Credit rescue is a negotiation approach used by creditors to save credit by providing an opportunity for the debtor to pay off their debt, despite having the right to execute.

Q: What are the benefits of using a Debt Recognition Deed in a credit agreement?

A: The benefits of using a Debt Recognition Deed in a credit agreement include:

Providing a formal proof of the debtor's obligation to the creditor
Having executorial strength similar to a judge's decision
Allowing the creditor to take possession of the collateral if the debtor defaults
Minimizing the risk of loss for the creditor

Q: What are the limitations of a Debt Recognition Deed?

A: The limitations of a Debt Recognition Deed include:

It may not be enforceable in all jurisdictions
It may not be effective in all cases of default
It may require additional documentation and procedures to be followed

Q: How can creditors ensure that they are using a Debt Recognition Deed effectively?

A: Creditors can ensure that they are using a Debt Recognition Deed effectively by:

Ensuring that the deed is properly executed and witnessed
Keeping accurate records of the debtor's obligations and payments
Following the procedures and laws governing debt recovery in their jurisdiction
Being proactive in communicating with the debtor and taking steps to recover the debt

Q: What are the implications of this study for the banking industry?

A: The implications of this study for the banking industry include:

The need for creditors to be more assertive in carrying out their execution rights
The importance of understanding the legal strength of execution of the Debt Recognition Deed in a credit agreement
The need for creditors to be proactive in communicating with debtors and taking steps to recover debts

Q: What are the future research directions for this study?

A: Future research directions for this study include:

Investigating the impact of the Debt Recognition Deed on the banking industry
Examining the effectiveness of the negotiation and credit rescue approach in recovering debts from defaulting debtors
Exploring the role of the bank's internal policies and procedures in executing the guarantee