Law Termination of Default on Credit of Guna Bhakti

Muthmainah, O. K. Isnainul, Aisyah, Elvira Pakpahan

Magister of Notary, Universitas Prima Indonesia, Jl.Sekip simpang Sikambing, Medan, Indonesia

Keywords: Cooperation Agreements, Defaults, and Legal Consequences.

Abstract: Credit Activities for Bhakti, the BJB Bank has procedures that must be taken when applying for credit. The

procedure was intended as a guideline for the BJB Bank in carrying out the Guna Bhakti lending process so

that the implementation of credit activities is as planned. BJB Bank in distributing its credit applies the

principle of prudence with the aim to reduce the risk of the emergence of non-performing loans (Non-

Performing Loans) which can occur at any time. The aim was to find out the statutory arrangements for the

implementation of granting credit for community service associated with legal services, due to legal defaults

on loan agreements for devotional service and how responsible for the Province of North Sumatera

education service was for bail out loans. This type of research uses empirical juridical and this research was

analytical descriptive. Sources of Legal Materials used are primary, secondary and tertiary legal materials.

The data collection technique was used library research and the researcher also conducts interviews. Data

analysis was carried out in a qualitative way. The results of the study are the legal provisions for granting

credit for community service associated with legal services including Article 1754 to 1769 Civil Code, Law

Number 10 of 1998 concerning Amendments to Law Number 7 of 1992 concerning Banking and Law

Number 21 of 2011 concerning the Financial Services Authority. The legal consequences of default on

credit for devotional service are the responsibility of the provincial education service based on corporate

guarantee. The responsibility of the agency was in the form of efforts to collect or deduct salary from the

defaulter debtor.

1 INTRODUCTION

Banking loans were channeled by banks to the

public in accordance with their main function of

collecting and channeling public funds. In the

implementation of the provision of bank credit, it

was usually associated with various requirements

(M. Bahsan, 2007). Lending to debtors was based on

trust. The bank believed that credit that has been

gived to dehiturs will be returned at a later date

when the credit was due, in accordance with the

conditions written in the credit agreement (loan

principal, loan interest, credit period, maturity date,

etc.) (Supriyono, 2011). If the credit disbursed

experiences a bottleneck, the steps taken to save the

credit are various. It was said to be various because

we saw the cause first. If it could still be helped,

then the action to help was either by increasing the

amount of credit or by extending the period of time

(Abdullah, 2013).

Credit according to the Banking Law Number 10

of 1998 was the provision of money or equivalent

claims, based on a loan agreement or agreement

between the bank and another party which required

the borrower to pay off its debt after a certain period

of time by giving interest. Almost all banks provide

credit facilities, one of which was PT. Jawah Barat

and Banten Regional Development Bank, Tbk

Medan Branch (BJB Bank). As a business entity that

has an important role on the economic growth of a

country and contributes greatly to the traffic of

payments and the allocation of funds, PT. The West

Jawah and Banten Regional Development Bank, Tbk

Medan Branch provides several credit facilities

which are concurrent with several credit products,

one of which was the Guna Bhakti Credit. Guna

Bhakti Credit was one of the credit products

provided by BJB Bank which was intended for Civil

Servants, privated employees of state-owned

enterprises and the Indonesian national army.

Deposit insurance amplified the impact of rising

crop prices on bank portfolios, while higher

minimum capital requirements dampened the

effects. Banks that responded most aggressively to

the asset boom had a higher probability of closing in

the bust, and counties with more bank closures

500

Muthmainah, ., Isnainul, O., Aisyah, . and Pakpahan, E.

Law Termination of Default on Credit of Guna Bhakti.

DOI: 10.5220/0010326400003051

In Proceedings of the International Conference on Culture Heritage, Education, Sustainable Tourism, and Innovation Technologies (CESIT 2020), pages 500-507

ISBN: 978-989-758-501-2

experienced larger declines in land prices (Jaremski,

2020).

In Guna Bhakti Credit activities, Bank BJB has a

procedure that must be followed when applying for

credit. This procedure was intended as a guideline

for BJB Bank in carrying out the process of

providing Guna Bhakti credit so that the

implementation of credit activities was as planned.

BJB Bank, in channeling its loans, applies the

principle of prudence with the aim of reducing the

risk of non-performing loans which can occur at any

time.

Guna Bhakti Credit also has a procedure that can

support the smooth distribution of credit itself. In

implementing the procedure, before credit was given

to a prospective customer, the bank was supposed to

carry out a credit analysis. This credit analysed was

useful so that the credit to be given to the customer

was truly safe and falls into the right hands of the

customer. One of them was Guna Bhakti Credit.

Guna Bhakti Credit was one of the credit products

provided by BJB Bank which was primarily

intended for Civil Servants.

In Guna Bhakti Credit activities, Bank BJB has a

procedure that must be followed when applying for

credit. The provision of this Guna Bhakti Credit

facility requires a prior cooperation agreement with

the agency or service where the prospective debtor

works. One of them was a cooperation agreement

between PT. Regional Development Bank of West

Jawah and Banten, Tbk Medan Branch with the

Education Office of North Sumatra Province

(Provincial Education Office) with multipurpose

purposes. Guna Bhakti Credit was a financing

provided by the Bank for fixed-income debtors

whose salaries have been channeled through the

Bank and/or where the debtor works and has a

cooperation agreement with the Bank where the

source of return comes from employee salaries

which are used for consumptive purposes.

Based on the fact that there is an imbalance of

bargaining position of the parties. Although the

agreement has put forward the principle of freedom

of contract. Freedom of contract is based on the

assumption that the parties to the contract have a

balanced bargaining position, but in reality the

parties do not always have a balanced bargaining

position (Pakpahan, 2017). This was very clearly

written into the Employment Law. That moral

outrage should be its own emphatic remedy, and a

philosophically informed approach to judicial

interpretation requires expressions of moral outrage

from the bench to address ongoing injustice or the

threat of injustice directed at vulnerable

communities such as women and religious

minorities in the current political climate (Rudolph,

2020). First, both equity-based compensation and

debt-like compensation induce risk-taking behavior

by the executives. Secondly, the correlation between

both the form of the compensation and the CDS

spread was weakened in a high information

asymmetry environment. Lastly, this study finds that

a CFO’s compensation has more influence on the

CDS spread, compared to the other board

executives, but this condition only occurs when the

compensation was awarded in the form of debt-like

compensation. To improve the generalization of the

results, a further study may consider expanding the

sample into several countries (Meizaroh, 2019).

On the process of providing credit, it was

expected that there will be communication between

the BJB Bank and customers who will appled for

credit. One of the efforts to establish this

communication was the process of providing credit

which was supported by the participation of the

customer by fulfilling various credit requirements in

accordance with the provisions imposed by Bank

BJB. For this reason, it was necessary to have good

cooperation in carrying out the Guna Bhakti credit

process between the bank and the debtor so that the

Guna Bhakti credit process runs smoothly. Credit

risk moderation on the loan relation and intellectual

capital with profitability. The sample selection

technique used purposive sampling method and data

analysis used moderated regression analysis. The

results show that loans have a positive effect on

profitability, intellectual capital has a positive effect

on profitability, and credit risk moderates the effect

of loans and intellectual capital on profitability

(Erzha, 2019).

In this cooperation agreement, there was an

agreement clause that has been agreed between the

two parties, namely PT. Regional Development

Bank of West Java and Banten, Tbk Medan Branch

with the Education Office of North Sumatra

Province. In order to ensure that the Guna Bhakti

Credit loan installments come from employee

salaries and anticipate possible risks that may arise

as a result of company / agency policies, the Guna

Bhakti Credit service must be supported by a

Cooperation Agreement between PT. Regional

Development Bank of West Jawah and Banten, Tbk

Medan Branch with the Education Office of North

Sumatra Province.

The contents of the Cooperation Agreement

include statements and guarantees, rights and

obligations, responsibilities and authorities of each

party, terms and procedures for Guna Bhakti Credit.

Law Termination of Default on Credit of Guna Bhakti

501

With the signing of the Cooperation Agreement by

the Branch Manager of PT. West Jawah Regional

Development Bank and Banten, Tbk Medan Branch

as the first party, with an official who has the

authority by the North Sumatra Provincial Education

Office, as the second party. In this case the first

party was willing to provide Guna Bhakti Credit

facilities to employees at the Education Office of

North Sumatra Province, the second party who

meets the terms and conditions set by the first party.

Law has three tools at hand to govern contract's

social cost: delineating subject matter about which

parties can bargain, interacting with parties as a

regulator, and, finally, interpreting and reforming in

court. Post-hoc consideration of social costs was the

least well-known, and most unsettled, mode of

governing contract externalities. We ground that

technique in its history as a specialized application

of the law of contract public policy. Practically, this

Essay advises parties negotiating whether and how

to perform to consider the public’s health, since

history teaches that, at least some of the time, courts

will too (Hoffman, 2020).

Extension of the subpoena power that agencies

like the SEC, FTC, and EPA possess and was the

lynchpin of a system that depends on private

litigants to enforce our most important statutes. By

forcing parties to disclose large amounts of

information, discovery deters harm and, most

importantly, shapes industry-wide practices and the

primary behavior of regulated entities. This

approach has a vast array of implications for the

scope of discovery as well as the debate over costs.

Scholars and courts should thus grapple with the

consequences of what I call “regulatory discovery”

for the entire legal system (Zambrano, 2020).

The existence of rights and obligations in the

Cooperation Agreement contains the same meaning

as the provisions in Article 1338 of the Civil Code,

which states that "all agreements made legally are

valid as law for those who make them". The

agreement cannot be withdrawn other than with the

agreement of the two parties, or for reasons

determined by law. So that these provisions bind the

bank as the creditor to exercise their rights and

obligations. The parties of PT. The Regional

Development Bank of West Java and Banten, Tbk,

Medan Branch with the Education Office of North

Sumatra Province have agreed and agreed to make

and sign a cooperation agreement for the provision

of Guna Bhakti Credit facilities.

Find that estimated coefficients for a minimal set

of theoretical determinants of default risk are

consistent with theory and are significant

statistically and economically. Volatility and

leverage have substantial explanatory power in

univariate and multivariate regressions. A principal

component analysis of residuals and spreads

indicates limited evidence for a residual common

factor, confirming that the theoretical variables

explain a significant amount of the variation in the

data (Jan, 2009).

Investors, who hold the economy's capital stock,

own the firms and supply credit, and workers, who

supply labor and demand credit to finance

consumption. Furthermore, workers condition their

consumption choice on the investors' level of

consumption. We estimate the model and find a

significant keeping up mechanism by matching

business cycle statistics. In reproducing credit

moments, our proposed model significantly

outperforms a model version in which we abstract

from consumption externalities (Mathias, 2020).

Access to the unfair dismissal jurisdictions of

industrial tribunals was now so limited that most

employees and employers are returned to the

position before awards gave unfair dismissal

protection, and laws were enacted to ameliorate the

inadequacies of the common law. This article

analyses the changes and contends that federal law

was 'back to the future' for unfair dismissal, and

predicts a return to reliance on contract law and

other remedies (Pittard, 2008). The Education Office

of North Sumatra Province was willing and able to

provide a Corporate Guarantee for the provision of

credit facilities by PT. Regional Development Bank

of West Java and Banten, Tbk Medan Branch, as

referred to in Article 1 number 6 of this agreement.

The content of Article 1 point 6 of the Corporate

Guarantee was the availability of the North Sumatra

Provincial Education Office to ensure the smooth

payment of loans to Bank bjb Medan Branch by

prioritizing salary deductions for employees who are

debtors of Bank bjb Medan Branch for installment

payments to Bank bjb Medan Branch based on a

credit agreement between Bank bjb Medan Branch

and employees outside of pieces related to

employment. Guarantee to give priority to the

deduction of the rights obtained by employees in the

event of termination of employment or other

consequences that result in termination of

employment in accordance with statutory

regulations. The guarantee provided does not

eliminate the obligation of giving the employee

power of attorney to the North Sumatra Provincial

Education Office in deducting the rights obtained by

employees upon termination of employment

relations.

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The difference in this research was how the legal

perspective between the cooperation between a

private bank, namely BJB bank, in cooperation with

an education office of the province of North

Sumatra. Which then was the legal consequence of

the default against the parties.

2 RESEARCH METHODS

This research uses empirical juridical method as a

research method. That was, analyzing the rules that

apply to the arrangements that occur in the field. For

the circumstances in the study, an interview method

was also carried out as an additional material that

strengthened the power of the test of whether the

legal consequences of failing for payments between

bank bjb and the Education Office of North Sumatra

Province were prepared.

In this study, taking data from the BJB bank that

has collaborated with the North Sumatra Provincial

Education Office in the service credit sector.

Especially in data collection through the interview

method and how the laws and regulations in the

company environment have different impacts, thus

giving rise to new enforcement of existing

regulations.

3 RESEARCH RESULTS AND

ANALYSIS

3.1 Legislative Regulations on the

Implementation of Credit for

Service Related to Legal Services

The legal force in the Cooperation Agreement

according to the provisions of Article 1338

paragraph (1) of the Civil Code was an agreement

made legally by both parties in this agreement, so

that the agreement was valided as law for both the

creditor (bank) and the second party in the

agreement. It acts for and on behalf of the agency /

company of the debtor or civil servant concerned.

The agreement cannot be withdrawn other than by

the agreement of the two parties, or for reasons

determined by law. The agreement in the above

agreement contains an important consensual

principle in the credit agreement.

The validity of an agreement as contained in

Article 1320 of the Civil Code was a condition for

the validity of an agreement where the agreement

was one type of agreement. According to Article

1321 of the Civil Code, it states that if an agreement

contains errors, coercion and fraud, it means that

there was a defect in the agreement between the

parties and therefore the agreement can be canceled.

According to Article 1329 of the Civil Code, it states

that everyone was capable of making an

engagement, unless the law states that the person

was incapable, people who are incapable of making

an agreement are minors and those who are placed

under pardon.

According to Article 1333 BW the goods which

become the object of an agreement must be certain,

at least the type must be determined, while the

amount does not need to be determined, as long as it

can be determined or calculated later. Article 1335

BW states that an agreement without cause, or that

has been made due to false or prohibited causes has

no power. False causes can occur when a cause does

not correspond to the actual or simulated cause. The

cause may also have been mistaken. Thus, what

matters was not what was stated as the cause, but

what was the actual cause. The definition of a lawful

cause was not what causes the agreement, but the

content of the agreement itself. The contents of the

agreement may not conflict with the decency law or

public order according to Article 1337 of the Civil

Code.

In the process of granting a credit agreement

before an agreement occurs, the customer must

apply for a credit which was completed with

conditions. After the agreement, there will be legal

consequences that result in rights and obligations

between the two parties. The bank was only bound

and obliged to provide credit for debtors and debtors

who are entitled to use the credit they receive from

the bank for credit purposes and up to a specified

date. The debtor was required to pay off all his loans

including interest, fines and interest in arrears as

well as other fees charged by the Bank to the debtor

no later than the end date of this Agreement.

The credit agreement between the debtor and

creditor was stated in the credit agreement. The

credit agreement contains the rights and obligations

of debtors and creditors. The credit agreement was

expected to make the parties bound by the

agreement fulfill all of their obligations properly.

However, in the credit agreement there are times

when one party does not fulfill the agreement

according to what has been mutually agreed. The

bank must have confidence that the debtor can repay

the debt according to the time limit specified in the

credit agreement. To obtain this assurance, before

extending credit, a bank must make a careful

assessment of the nature, ability, capital, collateral

Law Termination of Default on Credit of Guna Bhakti

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and guarantee of the agency. This was done to

reduce the risk of bad credit which can affect the

health of the bank.

Banks are only bound and obliged to provide

credit for debtors and debtors who are entitled to use

the credit they get from the Bank for credit purposes.

Meanwhile, the debtor was required to pay off all his

/ her credit including interest, fines and arrears and

other fees charged by the Bank to the debtor not

later than the end date of this Agreement.

Both the process of implementing the Guna

Bhakti Credit agreement at PT. West Jawah

Regional Development Bank and Banten, Tbk

Medan Branch with debtors and a cooperation

agreement made between PT. The West Java and

Banten Regional Development Bank, Tbk Medan

Branch with the Education Office of North Sumatra

Province was a standard contract, in which the

contents or clauses of the bank credit agreement

have been standardized and set forth in a form

(blank), but not bound to some form (Vron vrij).

3.2 Legal Consequences of Default on

Guna Bhakti Credit between BJB

Bank and the North Sumatra

Provincial Education Office

The legal consequences of default against credit for

non-compliance between BJB Bank and the

provincial education office and agency

accountability for debtor default include:

1. Default occurs due to negligence on the part

of the debtor

Based on article 1238 BW the debtor was

negligent, if he by means of a warrant or with

a similar deed has been declared negligent by

the expiration of the specified time.

Determination of default was a letter of

warning from the creditor to the debtor with

the aim of notifying when the debtor must

meet his performance at the latest. When there

have been repeated summons / reprimands, the

debtor still does not want to meet the mutually

agreed achievements, then he must bear all the

adverse consequences caused by not fulfilling

the achievements (Wulandari, 2016).

Debtors who get credit from the bank are not

entirely able to return the credit at the agreed

time. In fact, there are always some debtors

who for some reason cannot return credit to

the bank that has provided the loan. As a

result of the debtor being unable to pay off his

debt, the credit trip stops or was negligent. To

be clear, what was called default was a

condition in which a debtor was unable to pay

off a bank credit on time.

After the PT. The West Jawah and Banten

Regional Development Bank, Tbk Medan

Branch has delivered an amount as agreed in

the Guna Bhakti Credit agreement, so since

then the debtor has the obligation to pay off

the credit in accordance with the amount and

period of installments and interest as agreed.

However, due to various factors the debtor did

not fulfill his obligations, resulting in the

credit given to the debtor to become non-

current credit, doubtful and even negligent in

payment. Thus the debtor in this case was in

default as agreed

Fulfillment of achievements was the essence

of an agreement. The obligation to fulfill the

achievements of the debtor was always

accompanied by responsibility, meaning that

the debtor was risking his assets as a

guarantee for the fulfillment of his debt to the

creditor (Khairandy, 2014). The debtor was

said to be in default if the debtor does not

carry out his performance, where this

achievement was not carried out due to the

debtor's error either on purpose or due to

negligence, and all of these can be blamed on

him (Khairandy, 2014).

The debtor's action of not carrying out his

obligations was a form of default of not doing

what he was determined to do as agreed.

However, to state that a debtor has defaulted

was not necessarily based on the fact that the

debtor has not carried out his obligations in

accordance with what was agreed as agreed.

Article 1243 of the Criminal Code stipulates

that claims for default of an agreement can

only be made if the debtor has been warned

that he has neglected his obligations, but then

he continues to neglect it.

In the provisions of Article 1238 of the Civil

Code, it determines that the debtor was

negligent, if he has been declared negligent by

means of a warrant or with a similar deed, or

for the sake of his own engagement, this was

if this stipulates that the debtor must be

considered negligent by the expiration of the

specified time. From the provisions of Article

1238, one of the ways to declare a debtor was

negligent can be done in the form of a similar

deed or what was known as a summons.

2. The legal consequence of default was not as

promised

The provision of credit by banks was based on

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an agreement. Since the Guna Bhakti Credit

agreement has not been specifically regulated,

the principles and principles of agreement law

in civil law apply when entering into a Guna

Bhakti Credit agreement. When a debtor was

about to apply for a credit, the debtor must

pay attention to the clauses contained in the

Guna Bhakti Credit agreement. In Guna

Bhakti Credit agreements with banks, there

was usually a standard clause. This was not

prohibited because of the precautionary factor

implemented by the bank but sometimes it

does not match the expectations of the debtor.

In addition, it must be remembered that banks

are also looking for benefits from providing

Guna Bhakti Credit through debt interest that

must be paid by the debtor (borrower) to the

bank.

The Guna Bhakti Credit Agreement was

expected to make the parties bound by the

agreement fulfill all of their obligations

properly. However, in the loan-borrowing

agreement, there are times when one of the

parties does not fulfill the agreement

according to what has been mutually agreed.

A credit agreement was a principal agreement

that regulates the rights and obligations

between a creditor and a debtor. The Guna

Bhakti Credit Agreement was also one very

important aspect of providing Guna Bhakti

Credit.

However, in reality it does not always run

smoothly and well, because at one time,

whether intentionally or not, the debtor who

received the credit made a default so that PT.

The Regional Development Bank of West

Jawah and Banten, Tbk Medan Branch was

having difficulty asking for the loan

repayment installments. The emergence of

default was influenced by various factors,

these factors, namely because the income was

reduced, the treasurer was unable to directly

cut salaries due to external policies, bad faith

from the debtor and so on, resulting in the

debtor being unable to perform within a

predetermined period of time. The occurrence

of default was indeed due to factors from the

human person not to and / or being able to

fulfill the achievements that have been

promised was also one of the contributing

factors (Interview with Adrianus Ulun who

serves as branch leader of PT. Bank

Pembangunan Daerah Jawa Barat and Banten,

Tbk, 2019).

3. Default occurs due to weak credit supervision

on the part of the bank

As an effort to prevent potential non-

performing loans, the existing credit

supervision system at PT. The Regional

Development Bank of West Jawah and

Banten, Tbk Medan Branch has become a

good system to prevent potential problem

loans. The aspects that are monitored cover all

aspects that exist in the provision of credit,

namely aspects of internal supervision, legal

supervision which refers to debtor

supervision, and aspects of supervision of

credit quality, namely referring to the

collectability of loans. Credit supervision

techniques applied by PT. The Jawah Barat

and Banten Regional Development Bank, Tbk

Medan Branch was also a good supervisory

technique, which was not only supervising

externally but also internally and not only in

the form of administrative supervision but also

direct supervision in the field. Credit

supervision at PT. The Regional Development

Bank of West Jawah and Banten, Tbk, Medan

Branch was also carried out with a good

mechanism, which was carried out from the

credit planning stage to the evaluation of the

credit provided, so that credit supervision was

present in every stage of credit and is well

structured. In addition, credit supervision at

PT. The Regional Development Bank of West

Jawah and Banten, Tbk, Medan Branch was

more complete with the existence of internal

control as a form of internal credit supervision

which aims to avoid the abused of power of

every official involved in providing credit

(Interview with Adrianus Ulun who was the

Branch Manager of PT. Regional

Development Bank of West Java and Banten,

Tbk Medan Branch, 2019).

The implementation of this supervisory

function was the responsibility of each level of

management or each individual who manages

activities in the credit sector at each bank or

branch. So that in essence, credit supervision

activities are inherent in the organization and

existing work procedures that are managed by

each management / individual level.

Weak supervision from an early age, that was,

since the credit was given a decision by an

authorized bank official. In the case that

supervision was absolutely necessary,

especially when the Guna Bhakti Credit was

already in the hands of the customer,

Law Termination of Default on Credit of Guna Bhakti

505

monitoring must be carried out regularly.

Supervision of each Guna Bhakti Credit that

will be provided to debtors related to certain

large banks and debtors. Whether the

provision of Guna Bhakti Credit was in

accordance with the provisions outlined in the

main policy for distributing Ghuna Bhakti

Credit and the provisions outlined by the

central bank government (Interview with

Adrianus Ulun who was the Branch Manager

of PT. Bank Pembangunan Daerah Jawa Barat

and Banten, Tbk Medan Branch, 2019).

Debtor supervision was very important. Credit

officers can evaluate the creditworthiness of the

credit that has been granted, debtor supervision

policies, including the smoothness of installments

using the payment history form and debtor

collectability. In addition, banks also make efforts to

prevent the possibility of further losses on non-

current loans. One of the risks faced by banks in

providing Guna Bhakti Credit was bad credit.

Therefore, monitoring of non-performing loans must

still be carried out in accordance with the action

plan. Credit rescue was carried out by a special

division for restructuring, which was one of the

bank's efforts to generate credit so that debtors can

fulfill their obligations according to their abilities.

3.3 The Responsibility of the North

Sumatra Provincial Education

Office for the Guna Bhakti Credit

Default

The cooperation agreement that occurred between

the PT. The Regional Development Bank of West

Jawah and Banten, Tbk Medan Branch with the

Education Office of North Sumatra Province, in

practice sometimes it does not go according to the

wishes of the parties. These credit agreements can

create unwanted problems. Default was considered

as a failure to carry out the agreed promise because

the debtor does not fulfill the obligation without

reasons that can be accepted by law. It can be said

that it does not fulfill the achievement at all; cash

holdings meet the achievement; being late in

fulfilling achievement was wrong to fulfill

achievement. Since when a debtor was said to be in

default. This issue was very important because

default has certain legal consequences for the debtor

concerned. Negligence or failure was a situation that

occurs because one party does not fulfill its

obligations or allows a situation to take place in such

a way (non-performance), so that the other party was

unfairly disadvantaged because it cannot enjoy its

rights based on a mutually agreed contract. Because

of this, usually default was actively formulated in

the sense that default occurs when the obliged party

does not carry out its obligations or passively by

allowing conditions (which should have been

prevented) as defined in certain provisions

(Kusumohamidjojo, 2001). Usually reflected in the

clauses contained in the agreement between

creditors and debtors.

Based on the results of the research, the agency's

responsibility for debtor defaults was not carried out

significantly by the Provincial Education Office

because the corporate guarantee in the clause in the

cooperation agreement was not made specifically

which explained in more detail and steps that had to

be taken including the obligation of the provincial

education office if the debtor was a an employee in

the agency committed default In addition, it was also

found that the head of the department has limited

authority regarding changes in external policies

which resulted in the treasurer being unable to cut

employee salaries to be deposited with the Bank

according to the cooperation agreement.

4 CONCLUSIONS

The statutory arrangements either in the Civil Code

or the Banking Law clearly regulate the law of

agreements including credit agreements. In the credit

agreement for bhakti rights, it has fulfilled the

legislation. The rights and obligations of the parties

based on credit for service are set forth in the form

of a standard contract which results in finding

weaknesses in the agreement clause where the

Coorporate Guarantee clause does not clearly

explain the obligations of the provincial education

office as a basis for the service's consideration to be

responsible for defaults and also for the interests of

the Bank. in asking for official responsibilities.

The legal consequence of default on credit for

devotion between Bank BJB and the Provincial

Education Office results in the Agency having to

take responsibility due to the existence of a

cooperation agreement that underlies the credit for

service.

The responsibility of the education office for

defaulting debtors was in the form of taking part in

the efforts deemed necessary so that the default

debtor can meet his performance again, such as

making summons, warning letters, efforts to

withhold salaries or allowances and other income for

installment payments to BJB Bank.

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