Mortgage regulated under the Law No. 4 of 1996 on Mortgage (“Mortgage Law”). Under the Mortgage Law, it is regulated that guarantee repayment of debt through mortgage provides a feature which is called the preferred creditor/ kreditur preferen. Preferred creditor is a creditor who has priority/ privilege right more than other creditor for the debt repayment of debtor in the case of failure events receivable. The holder of mortgage lender who is also separatist creditor has separated position than other creditor in condition of bankruptcy of the personal or legal entity. It is regulated under the Law No. 37 of 2004 on Bankruptcy and Suspension of Payment.


According to the Great Dictionary of Indonesian Language (Kamus Besar Bahasa Indonesia), execution is “Pelaksanaan putusan hakim; pelaksanaan hukuman badan peradilan atau Penjualan harta orang karena berdasarkan penyitaan.”

Under the Mortgage Law, there are 3 (three) types of the mortgage execution:

1. Executorial Title

Is execution according to irah-irah “Demi Keadilan Berdasarkan Ketuhanan Yang Maha Esa”. The method of that execution is performed by institution of parate executie. It is based on the Code Civil Law. This type of execution has the same strength with court decisions that already have permanent legal force.

2. Execution of The Own Power / Eksekusi atas kekuasaan sendiri

Under The execution of the rule itself has to be settled in previous agreements. According to Article 20 (1) a jo. Article 6 of Mortgage Law, if the debtor defaults then the first mortgage lender has the right to sell the mortgage object on its own power through a public auction and taking the payment of claims from the proceeds.

3. The Underhand Execution/ Eksekusi Dibawah Tangan

The object of the underhand execution is regulated under Article 20 (2) and (3) of the Mortgage Law. The essence of this clause is the existence of an agreement between the giver and the mortgage holders that the sales of the underhand object will obtain the highest price which will benefits all parties. The underhand sales can only be done after 1 (one) month notice in writing by the mortgage holders to the interested parties and it should be published in at least 2 (two) newspapers which circulating in the relevant area and there is no objection from any parties.

Ivan Ari & Ivan Setiady

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