Legal Protection for Creditors Holding Second Rank Collateral that Cannot Be Executed

Mortgage right is the main collateral in banking that provides legal certainty for creditors in credit agreements. The ranking system in Hak Tanggungan determines the priority of debt repayment, where the first ranked creditor has the main right to the proceeds of the execution of the collateral. Subsequent ranking creditors only receive repayment if there are still remaining proceeds from the execution. An empirical juridical approach is used in this research to understand the normative aspects and legal practices in the community. The inability of second ranking creditors to execute collateral is often caused by the insufficient value of the collateral object. To reduce disputes, a clear agreement and notarial deed recording in APHT are required. Collateral execution can be carried out through litigation and non-litigation mechanisms to ensure the fulfillment of creditor rights in cases of default.