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Debt Compromise Agreement Template for Indonesia

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Key Requirements PROMPT example:

Debt Compromise Agreement

"I need a Debt Compromise Agreement for my manufacturing company to settle a $500,000 outstanding loan with ABC Bank Indonesia, where they've agreed to accept 70% of the total debt paid in monthly installments starting March 2025, with a corporate guarantee from our parent company."

Document background
The Debt Compromise Agreement is a crucial document used in Indonesian business and financial transactions when parties seek to resolve outstanding debt obligations through negotiated settlement. This document becomes necessary when a debtor is unable to fulfill their original debt obligations and the creditor is willing to accept a reduced amount or modified terms in full settlement. The agreement must comply with Indonesian Civil Code requirements and, where applicable, Financial Services Authority (OJK) regulations. It typically includes detailed information about the original debt, the compromise terms, payment schedules, and mutual releases. This type of agreement is particularly relevant in post-COVID business recovery scenarios, corporate debt restructuring, and financial distress situations where preserving business relationships while ensuring debt recovery is paramount.
Suggested Sections

1. Parties: Identification of the debtor and creditor(s), including their complete legal names, addresses, and authorized representatives

2. Background: Recitals explaining the original debt, current outstanding amount, and circumstances leading to the compromise agreement

3. Definitions: Definitions of key terms used throughout the agreement, including 'Original Debt', 'Compromise Sum', 'Settlement Date', etc.

4. Acknowledgment of Debt: Clear statement of the original debt amount and acknowledgment by the debtor

5. Terms of Compromise: Details of the compromised amount and terms of settlement, including any discount or reduction

6. Payment Terms: Schedule of payments, payment method, and consequences of default

7. Releases and Waivers: Mutual releases and waivers upon completion of the compromise payments

8. Representations and Warranties: Standard representations about capacity to enter agreement and accuracy of financial information

9. Events of Default: Definition of default events and consequences

10. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and choice of forum for disputes

11. Notices: Process for giving formal notices under the agreement

12. Execution: Signature blocks and execution formalities

Optional Sections

1. Security Arrangements: Include when the compromise agreement is secured by collateral or guarantees

2. Multiple Creditor Provisions: Required when there are multiple creditors involved in the compromise

3. Corporate Guarantee: Include when a parent company or related entity is providing a guarantee

4. Tax Provisions: Detailed tax implications and responsibilities when significant tax consequences arise from the debt compromise

5. Regulatory Compliance: Special provisions when either party is regulated by OJK or other regulatory bodies

6. Restructuring Terms: Include when the compromise involves debt restructuring rather than simple reduction

7. Confidentiality: Detailed confidentiality provisions when parties require strict privacy of terms

Suggested Schedules

1. Schedule 1 - Debt Details: Detailed breakdown of the original debt, including principal, interest, and other charges

2. Schedule 2 - Payment Schedule: Detailed payment schedule with dates, amounts, and payment methods

3. Schedule 3 - Security Details: Details of any security or collateral provided under the agreement

4. Schedule 4 - Original Debt Documentation: List and copies of original debt documents being compromised

5. Schedule 5 - Corporate Authorizations: Copies of corporate approvals and authorizations

6. Appendix A - Form of Release: Template for the final release document to be issued upon completion

7. Appendix B - Calculation of Compromise Sum: Detailed calculation showing how the compromise amount was determined

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions































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Relevant Industries

Banking and Financial Services

Real Estate and Property

Manufacturing

Retail and Commerce

Construction

Mining and Resources

Agriculture

Transportation and Logistics

Healthcare

Technology and Communications

Hospitality and Tourism

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Collections

Compliance

Corporate Secretariat

Debt Recovery

Account Management

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Debt Recovery Manager

Credit Risk Manager

Treasury Manager

Restructuring Officer

Collections Manager

Corporate Secretary

Financial Controller

Compliance Officer

Account Manager

Recovery Specialist

Business Development Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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