Our Services · Debt Recovery
Debt Recovery in Indonesia
Overdue receivables rarely resolve themselves. We help creditors choose a recovery route proportionate to the amount owed and the debtor's condition, and pursue it to the end.
Signs that a receivable needs legal action
- The debtor keeps promising to pay, but the date keeps moving.
- Your in-house collection team no longer gets a reply.
- After a long silence, the debtor suddenly disputes the amount or the quality of the goods.
- You hear that the debtor is also in arrears with other suppliers.
- The evidence is scattered across purchase orders, invoices, delivery notes, and messages, and has never been put in order.
Recovery routes we consider
| Route | Suitable for | Notes |
|---|---|---|
| Negotiation and demand letter (somasi) | Debtors still acting in good faith, or relationships worth preserving | A well-drafted demand letter also serves as evidence that the debtor was formally notified, should the matter proceed |
| Small claims procedure (gugatan sederhana) | Breach of contract or tort claims with a material value of no more than IDR 500 million | Article 3(1) of Supreme Court Regulation (PERMA) No. 2 of 2015 as amended by PERMA No. 4 of 2019. The judge may order a pre-judgment attachment (Article 17A) |
| Ordinary civil lawsuit | Claims above IDR 500 million, or disputes with complex evidence | The process is longer, so attachment and enforcement strategy should be planned from the start |
| PKPU or bankruptcy | Debtors with more than one creditor and a debt that is due and payable | Articles 2(1) and 222(3) of Law No. 37 of 2004. More on creditor representation in PKPU |
What we do
Put the evidence in order. We assemble agreements, purchase orders, invoices, delivery notes, and correspondence into a single chain of evidence, so the claim is hard to dispute.
Check the debtor's condition. We look at the debtor's corporate status, reachable addresses, pending court cases, and available asset information, and use this to judge which route is realistic.
Draft demand letters and lead negotiations. Where an agreement is reached, we record it in a settlement agreement or acknowledgement of debt that can be enforced, not merely a verbal promise.
File the lawsuit and follow it through to enforcement. We do not stop at the judgment, because a judgment that is not carried out has recovered nothing.
File for PKPU or bankruptcy where the requirements are met and that step genuinely creates the right pressure.
For foreign creditors
Before choosing a route, we start with your contract's governing-law and dispute-resolution clauses. If the contract refers disputes to arbitration, the Indonesian courts will generally decline jurisdiction, and the claim must be brought before the agreed tribunal (see Commercial Disputes and Litigation).
If you already hold an arbitral award issued outside Indonesia, it can be enforced here once it has obtained an exequatur from the Chief Judge of the Central Jakarta District Court, provided the conditions in Articles 65 and 66 of Law No. 30 of 1999 are met.
Why Sagara
Not every receivable is worth taking to court. Our first question is always the same: how much can realistically be recovered, at what cost, and over what time?
Our team's experience as Receivers and Administrators helps us judge when PKPU creates effective pressure and when it backfires. Against a debtor whose assets are already gone, for example, unsecured creditors can walk away with almost nothing.
We apply the same three layers to every case: identification of the evidence and the debtor's condition; assessment of the proportionate route; and management of that route through to completion.
Frequently asked questions
Should a demand letter be sent before filing a lawsuit?
In breach of contract cases, a demand letter generally serves as evidence that the debtor was notified and declared in default. The Indonesian Civil Code provides that a debtor is in default by a formal demand or similar deed, or by the terms of the obligation itself once the agreed deadline has passed (Article 1238), and compensation for costs, losses, and interest becomes due once the debtor, despite having been declared in default, still fails to perform (Article 1243). We therefore almost always recommend a demand letter as the first step, unless the contract provides otherwise.
What is the limit for the small claims procedure?
The material value of the claim may not exceed IDR 500 million (Article 1 point 1 and Article 3(1) of PERMA No. 2 of 2015 as amended by PERMA No. 4 of 2019). Each side may consist of only one party, unless several parties share the same legal interest, and the procedure is not available against a defendant whose whereabouts are unknown (Article 4(1) and (2)).
Can PKPU be used to collect a debt?
Yes, if the requirements are met. But PKPU is a collective process involving all creditors, and its outcome depends on the composition plan that is agreed. It needs careful judgement, not merely use as a pressure tactic.
What documents should I prepare for an initial consultation?
The agreement or purchase order, invoices, proof of delivery or handover, records of any payments received, and collection correspondence. Incomplete documents are not a problem; mapping the gaps is exactly where we start.
Receivables handled early usually leave more options open. We accept consultations by appointment.