Insolvency tests crucial for preventing abuse in Indonesian bankruptcy institutions.
Bankruptcy institutions in Indonesia do not currently consider insolvency as a basis for granting bankruptcy status to debtors. This leads to misuse and vulnerability. A study suggests that insolvency tests are crucial for bankruptcy institutions to function properly. Without these tests, the purpose of bankruptcy institutions is lost. Insolvency tests should be used to determine if a debtor is unable to pay their debts, even if it requires more complex evidence gathering.