It is a common strategy that creditors use police complaints/reports as means to coerce debtors to repay on their loan obligations.

This begs the question whether failure to repay on any debt obligations entails criminal punishment such as imprisonment.

Threatening to report to the police is a favorite tactic as means of corceion because most people are afraid to deal with the police.

This note discusses when breach of a debt obligation will or will not result in criminal sanction.

We hope to address these questions include “if I fail to pay or fulfill my contractual obligations, will I be criminally punished?”.

Contractual obligations and consequences of breach are governed by the Civil Code – see I’m particular article 1365 – the person who fails to fulfill his or her promise means that he or she defaulted or broke his promise.

However, this does not stop people from abusing the criminal process thinking that this can arm twist the party in breach into giving in to the demands of the person threatening to report to the police.

The Supreme Court has offered guidance in this regard.

See Case No. 4/Yur/Pid/2018 which essentially states:

The parties who do not fulfill the obligations in the agreement made legally are not considered to be fraudulent, but default which is included in the civil realm, UNLESS THE AGREEMENT WAS BASED ON BAD/BAD FAITH.

Further support from other court decisions below.

Decision No. 598 K/Pid/2016

The defendant borrowed Rp. 4,7500,000.00 (four million seven hundred fifty thousand rupiahs, but failed to repay the debt in accordance with the agreed time frame, despite repeat demands. Court decided that this is a civil dispute but not a criminal act , so that the settlement is in the domain of civil law, and the defendant should therefore be released from all criminal prosecution.

Putusan (Decision) No. 1316 K / Pid2016

This case concerns a sale and purchase agreement between the complainant and the defendant. The defendant failed to fulfill his obligations in the agreement. Likewise, Court decided that this is a civil dispute but not a criminal act, and the defendant should therefore be released from all criminal prosecution