Insolvency Test as The Requirement for Bankruptcy Declaration to Maintain Investment Conduciveness in Indonesia

Legal uncertainty in Indonesian bankruptcy cases stems from ambiguity in concept, regulation, and application of insolvency tests. Consequently, it is difficult to distinguish the discontinued debt payment due to a genuine inability or a deliberate decision. The former refers to the occurrence of bankruptcy, while the latter refers to a breach of contract that should only go to an ordinary civil lawsuit. The data analysis employs a qualitative juridical analysis method. The study found that the current law does not require the insolvency test law for declaring bankruptcy. The requirements to declare bankruptcy are only the existence of debts, maturity date, and two creditors. The insolvency test is necessary for submitting a bankruptcy application. There should be legal certainty in settling debt conflicts between the debtors and creditors and impeding debtors from declaring bankruptcy who are still in a solvent state. The regulation regarding the insolvency test is to accommodate the interests involved in it, both from the material legal aspect and from the formal legal aspect. From the material legal aspect, it is necessary to emphasize, among other things, that the insolvency test cannot be applied if the debtor is an individual or a company that does not involve an enormous public interest.