Auction distribution review
Compare sale proceeds and distribution records with the loan and security documents.
Surabaya · East Java · Indonesia
Debt Verification Before Auction in Surabaya — Ensuring Fair Debt Calculation
After collateral is sold, compare the auction proceeds with a documented payoff calculation rather than assuming the sale either clears the loan or leaves a balance. The borrower needs an itemised distribution showing proceeds, costs, secured claims, payments, and any amount remaining.
Auction and execution law in East Java.
Request the auction minutes, sale price confirmation, distribution statement, loan ledger, and a payoff calculation as at the auction date. Reconcile principal, contractual interest, default charges, and fees against the facility agreement and payment history. Include any other registered security interests or enforcement costs disclosed in the file; the order and priority of claims may affect what remains for the borrower.
If proceeds exceed the amounts properly payable, ask for the balance and the basis of each deduction. If proceeds are short, request a written explanation of the shortfall before accepting a demand. A shortfall claim depends on the contract, applicable law, and distribution; an unexplained number should be checked, not presumed valid or invalid.
When you need this service.
The bank demands a post-auction balance but has not supplied an itemised reconciliation.
Sale proceeds appear greater than the stated loan and disclosed costs, but no surplus is accounted for.
The lender’s payoff figure includes payments or charges that do not match your records.
Several creditors or security interests may claim priority in the same proceeds.
A company needs a defensible account reconciliation for auditors, directors, or foreign stakeholders.
Auction and execution framework in Indonesia.
UU 4/1996 governs Hak Tanggungan and addresses enforcement and distribution in its statutory context; the actual allocation must be checked against the security, competing claims, and auction record. Auction costs, secured debt, and any surplus should not be reduced to an assumed universal formula without reviewing the applicable documents and law.
A borrower can request supporting records and dispute an account calculation through the relevant lender process or court where appropriate. The competent forum depends on the underlying claim and contract. If a foreign creditor or corporate borrower is involved, authority, currency conversion, applicable law, and accounting records may add issues requiring separate review.
Legal References
How we handle auction matters.
We build a reconciliation table from the ledger and auction proceeds, tying every debit and credit to a dated document. We flag disputed interest, costs, omitted payments, competing claims, and any unexplained residual balance rather than selecting a number without support.
We then prepare a targeted request for records or correction and assess negotiation, complaint, or litigation options. The client receives a clear list of assumptions and missing evidence, including whether an independent accountant or valuation specialist is needed; legal review does not replace accounting verification.
Our Services
Debt ledger reconciliation
Trace principal, interest, charges, payments, and dates against the lender’s calculation.
Surplus or shortfall correspondence
Request supporting detail and present a document-based position on any balance.
Dispute strategy
Assess lender complaint, settlement, or court options based on the nature of the accounting disagreement.
Frequently Asked Questions
Can the bank claim a balance after selling collateral?
A shortfall may remain depending on the loan terms, sale proceeds, allocation, and applicable law. Ask for an itemised calculation and supporting records before deciding whether to pay or dispute it.
What if the sale price exceeded my debt?
Request the distribution statement, including costs and any other claims paid from proceeds. Whether money is payable to you depends on the verified amounts and priorities, not only the headline sale price.
Which documents are most important?
Obtain the facility and security documents, account statements, payment receipts, auction minutes, sale confirmation, distribution, and any demand for the remaining balance. Preserve the date and source of each record.
Does UU 4/1996 set a simple universal payment formula?
The statute provides a framework for mortgage enforcement, but the actual distribution must be tested against the transaction, costs, competing rights, and current rules. Counsel should verify the specific provisions before stating a claimed entitlement.
Can a foreign parent company review an Indonesian subsidiary’s balance?
Access depends on the borrower’s authority, confidentiality obligations, and corporate records. Prepare board authorisation and the relevant facility documents, and clarify whether the parent is a guarantor or merely a shareholder.
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Request a consultation.
Describe your legal needs. A senior partner will respond within one business day.
info@integralaw.id
Jl. Juwono No.7-8, Darmo, Kec. Wonokromo, Surabaya