AcreditagreementexecutedwithoutcollateralremainslegallyvalidunderIndonesiancivillawinsofarasitcomplieswithArticle1320oftheCivilCode.Althoughsucharrangementsarenotregulatedunder the Mortgage Law due to the absence of land or building collateral, this type of credit is still recognized inbankingpracticesandmaybeimplementedaslongasitadherestotheprudentialprinciplesapplicabletocreditworthiness assessment.Nevertheless, theabsence ofmortgage rightssignificantly weakens the creditor’slegalpositionwhendefaultoccurs,asiteliminatesthepossibilityofdirectexecutionagainstthecollateral.Accordingly,disputeresolutionmustbepursuedthroughcivillitigation.SuchcircumstancesarereflectedinDecision No. 273 /Pdt.G/2023/PN.Jkt.Sel, which demonstrates that third-party assets pledged without mortgagerightscannotbedirectlyenforced.Evenwhentheassetphysicallyexists,theestablishmentofamortgageconstitutes an indispensable requirement to ensure legal certainty and the creditor’s priority ranking. Without it,the pledged property is treated merely as general collateral without preferential status, thereby compelling theparties to rely on general legal remedies or negotiation, both of which entail a substantial risk of inefficacy