Protection of Separated Creditors Who Hold Security Rights over The Assets of Bankrupt Debtors Located Abroad

Secured creditors, who hold security rights over property such as mortgages, pledges, or fiduciary rights, have a special position if the debtor is declared bankrupt. Legal protection for secured creditors in Indonesia is regulated by Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations and Law Number 42 of 1999 concerning Fiduciary Guarantees. However, when some of the debtor's assets are located abroad, Indonesian court decisions often lack cross-jurisdictional execution power due to the principle of territoriality in international law. This study aims to analyze the legal position of secured creditors over cross-border assets, the available legal protection mechanisms, and normative and practical solutions to address obstacles to international execution. The study was conducted through a normative juridical approach, including analysis of legislation, legal doctrine, and a comparative study of cross-border insolvency practices in several countries. The research findings demonstrate the need to adopt international instruments such as the UNCITRAL Model Law on Cross-Border Insolvency, as well as reform national bankruptcy laws to strengthen the mechanisms for recognizing and enforcing foreign judgments. This will enable secured creditors to obtain more effective legal protection, not only formally but also in practice, particularly in the face of the complexity of cross-border transactions. This research contributes policy recommendations and legal strategies that can be implemented to ensure the protection of secured creditors' rights, while simultaneously increasing legal certainty and efficiency in cross-border bankruptcy proceedings.