Asset seizure execution

Asset seizure holds a central position in the Swiss legal system, particularly in the context of debt collection and bankruptcy law. It is defined as the act by which the state, represented by the debt collection office, takes possession of a debtor’s assets to sell them and repay a creditor. Asset seizure is an integral part of the Swiss debt recovery system and is seen as an effective measure to ensure compliance with financial obligations.

An overview of debt collection and bankruptcy law in Switzerland is essential to understand the complexity of the asset seizure procedure. The Federal Act on Debt Collection and Bankruptcy (FDCB) constitutes the legislative framework governing this area. It aims to guarantee a balanced and transparent process, ensuring creditors’ rights while protecting the debtor against arbitrary measures. Debt collection law revolves around several stages, with asset seizure being a key component, requiring in-depth knowledge and specialized expertise.

Asset seizure procedure

The asset seizure procedure in Switzerland begins with the pursuit request, which is the first step that allows a creditor to exercise their rights against a defaulting debtor. This request must be addressed to the competent debt collection office and must contain specific information such as the names and addresses of the parties, the amount of the claim, and the cause of the debt. The pursuit request leads to the issuance of a payment order, which is then notified to the debtor.

The payment order is the act by which the debtor is formally required to settle the debt within a specified period, usually 20 days. It is a critical step in the asset seizure procedure, as it informs the debtor of the claim and offers them the opportunity to oppose it. If the debtor does not react within the allotted time, the pursuit can continue. Conversely, if an opposition is raised, this leads to a separate opposition procedure.

The opposition procedure can be initiated by the debtor if they believe that the claim is not due or that the amount is incorrect. The opposition to the payment order must be made in writing to the debt collection office. This step allows the debtor to contest the claim, but it does not suspend the pursuit procedure. The creditor must then approach a court to lift the opposition and continue the procedure. The opposition procedure can be complex and often requires the intervention of a specialized lawyer.

After the expiration of the opposition period or the lifting of the opposition by a court, the continuation of the pursuit is the next step. The creditor must request this from the debt collection office, which then undertakes the necessary steps for the realization of the asset seizure. The continuation of the pursuit can take various forms, such as the seizure of movable property, real estate seizure, or wage assignment. The specific form of seizure depends on various factors, including the nature of the claim and the debtor’s available assets.

The decision-making stage of the asset seizure and preparatory acts is vital in the seizure procedure. The debt collection office assesses the assets that can be seized and takes the necessary measures to ensure the sale of these assets. Preparatory acts include inventorying the assets, assessing their value, and taking measures to protect these assets until their sale. This stage requires a thorough knowledge of applicable rules and regulations and close cooperation between the debt collection office, the creditor, and the debtor.

Asset seizure in Switzerland can take different forms, and the choice among these forms depends on the nature of the claim, the debtor’s available assets, and other specific factors. The seizure of movable property involves taking possession of and selling personal assets, such as furniture, vehicles, or jewelry. Real estate seizure concerns properties like houses or land. Wage assignment allows the creditor to receive a portion of the debtor’s salary until the debt is paid. Each form of seizure presents unique challenges and requirements and necessitates particular attention to details and applicable regulation.

The rights and obligations of the concerned parties during the asset seizure are also of crucial importance. The creditor has the right to choose the form of seizure and to participate in certain stages of the procedure. The debtor, on the other hand, has specific obligations, such as providing information about their assets, but also has rights, such as protection against abusive seizure or the protection of certain essential assets for their daily life. Third parties may also have rights and obligations, for example, if the seized assets are in the possession of a third party. Understanding and navigating these rights and obligations require legal expertise and a deep knowledge of Swiss debt collection law.

The last sub-section of this section concerns cantonal particularities in the asset seizure procedure. While the FDCB establishes a federal framework, there are differences in the implementation of the asset seizure procedure among the different cantons in Switzerland. These differences can concern aspects such as fees, deadlines, or methods of selling seized assets. Lawyers and parties involved in an asset seizure must therefore be aware of the specific rules and practices of the concerned canton. This can add a layer of complexity to the procedure and requires familiarity with local laws and regulations.

Execution of the asset seizure

The execution of asset seizure begins with the assessment of the seized assets. This step requires expertise to determine the fair market value of the assets, whether they are movable or real estate. Experts may be called in to appraise specific items, such as artworks or properties. The assessment must be conducted fairly and transparently, in compliance with applicable rules and regulations.

Once the assessment is completed, the seized assets are sold, usually at public auctions. This sale must be organized in accordance with the rules established in the Federal Act on Debt Collection and Bankruptcy (FDCB), and it must be publicly announced to ensure open and fair competition. The sale process must be transparent, and the concerned parties, such as the creditor and the debtor, must be informed of the sale details.

After the sale of the seized assets, the proceeds from the sale are distributed according to a well-established legal hierarchy. First, the costs of the asset seizure procedure are covered. Then, privileged creditors receive their payment, followed by unsecured (chirographary) creditors. The distribution must follow the rules set out in the FDCB and respect the rights and priorities of each creditor. If multiple creditors are involved, the distribution can become complex and require meticulous coordination.

The execution of asset seizure incurs various costs and fees that can be substantial. These costs include assessment fees, costs of organizing the sale, expert fees, administrative expenses, and other associated expenses of the procedure. The costs are generally covered by the proceeds from the sale, but if the proceeds are insufficient, the creditor may be held responsible for certain costs. A clear understanding of potential costs and efficient management of these costs are essential for a successful execution of the asset seizure.

The execution of asset seizure is not an uncontested process and leaves room for various appeals and provisional measures. The debtor, and sometimes even the creditor, can contest certain aspects of the execution. For example, the debtor may request a judicial review if the assets were assessed or sold unfairly. Provisional measures can also be requested to suspend the execution of the asset seizure pending the resolution of a dispute. These appeals must be undertaken within prescribed deadlines and in compliance with relevant legal provisions. Navigating through these appeals often requires the assistance of a specialist in debt collection and bankruptcy law to ensure that the rights of all parties are respected.

The execution of asset seizure has significant consequences for both the debtor and the creditors. For the debtor, seizure can lead to the loss of essential assets and have a lasting impact on their financial situation and reputation. Swiss laws provide certain protections for the debtor, particularly regarding unseizable assets, but seizure remains a drastic measure.

For creditors, the execution of asset seizure is often the last resort to recover a claim and can be a lengthy and costly process. Even if the seizure is successful, there is no guarantee that the creditor will recover the entire claim, especially if the debtor is in a precarious financial situation or if multiple creditors are involved.

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PBM Avocats in Geneva

Boulevard Georges-Favon 26

1204 Genève

T. : +41 22 348 32 35