<![CDATA[This study aims to analyze the legal framework governing insolvency period limits and their contribution to creditor protection within the broader framework of sustainable economic development in Indonesia. Under Article 2 paragraph (1) of Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations (UU KPKPU), a debtor may be declared bankrupt upon satisfying relatively simple statutory requirements without undergoing a substantive insolvency test. This study employed a normative legal research method using statutory and conceptual approaches. Secondary data comprising primary, secondary, and tertiary legal materials were analyzed qualitatively to identify legal gaps and formulate a proposed reconstruction of insolvency regulation. The findings indicate that the absence of explicit insolvency tests, such as the balance sheet test or cash flow test, may create legal uncertainty, increase the risk of misuse of bankruptcy proceedings, and potentially expose solvent companies to bankruptcy, thereby affecting economic stability. Accordingly, this study proposes a legal reconstruction incorporating objective insolvency criteria into Indonesia’s bankruptcy framework. The proposed framework is expected to strengthen creditor protection, enhance investor confidence, and promote the use of bankruptcy proceedings as a mechanism for addressing genuine financial distress rather than merely as a means of debt collection. Establishing clear insolvency criteria and legally defined time limits could strengthen financial market stability and contribute to long-term sustainable economic development through a more balanced and equitable bankruptcy framework for relevant business stakeholders.]]>
