Legal Protection for Assignee over Repeated Cession Based on Indonesia Legal System

Abstract

Humans require fundings in fulfilling their needs in life, such as primary, secondary, and tertiary necessities. Funds are used for some purposes such as venture development, working capital, investment, etc. In accordance to the function of bank which is to gather and distribute fundings to the society, banks may distribute such fundings in the form of loan. The granting of loan from banks as creditors is written in a loan agreement document. In fact, there will always be risk of non performing loan, which lead to the process of Cession, to shift the creditor’s right to claim debt payment, from Bank (as Assignor) to a new creditor (as Assignee). Repeated process in assigning right to claim receivables may cause loss to the Assignee, and the right of the Asignee has to be protected by the law. The method used in this study is the juridical normative method on a descriptive analytical nature. The study also uses statue approach and conceptual approach. The aims of this research is to have further review and analysis, about how Indonesian legal system regulates the settlement of credit, related with cession / assignment, which has been done more than once. The conclusion that can be drawn is: Cession is a legal action which causes a main legal consequences, that is shifted right to claim payment of debt, from first creditor to the new creditor. Debtor still have obligation to pay the debt, but now to the new creditor. In fact, cession is done because the first creditor consider several conditions in the debtor, that makes the debt potentially unpaid. The new creditor has to consider and understand the risks before signing cession agreement. Repeated cession has no clear regulation in Indonesia, but it’s commonly done by bankers and credit practicioners. This research sugests: government should issue regulation regarding the implementation of repeated cession, in order to protect the rights of the last Assignee. For bankers and credit practicioners, repeated cession should not be considered as recommended way to solve non-performing loans.