Debt collection in Switzerland is a legal process strictly regulated by the Federal Law on Debt Collection and Bankruptcy (LP). It is the means by which a creditor can recover a debt from a debtor in the event of non-payment.
The debt collection procedure begins with the dispatch of a summons to pay to the debtor, issued by the debt collection office at the request of the creditor. This document constitutes a formal summons to pay the debt and specifies a deadline for payment.
If the debtor contests the debt within 10 days, the procedure is interrupted and the creditor must obtain a court judgment to continue. If the debtor does not contest the debt, the procedure continues with the seizure or bankruptcy phase, depending on whether the debtor is a natural or legal person.
In the seizure phase, the debtor’s assets are seized and sold at auction. The proceeds of the sale will be used to satisfy the debt. If the debtor is a company, the procedure may lead to bankruptcy, where the company’s assets are liquidated and distributed among the creditors.
The debt collection requisition is the formal request made by the creditor to the debt collection office to initiate collection proceedings. It is the first step in the debt collection process, and must be carefully prepared to comply with legal requirements.
The requisition must be made in writing and contain precise information such as the full identity of the creditor and debtor, the amount of the claim, the due date, and proof of the claim if necessary. If the requisition is incomplete or incorrect, it may be rejected by the debt collection office.
Once the debt collection requisition has been filed and accepted, the debt collection office issues the summons to pay to the debtor, thus officially launching the procedure. From this point onwards, the legal deadlines start to run and the debtor is officially in debt collection proceedings.
The summons to pay is a key stage in the Swiss debt collection procedure. Issued by the debt collection office following the debt collection requisition, it serves as official notification to the debtor of the debt due, and constitutes a formal summons to pay.
The summons to pay contains essential information such as the name and address of the creditor and debtor, the amount due, and any costs and interest. It also mentions the 10-day period the debtor has to contest the debt.
If the debtor wishes to contest the claim, he must do so within this 10-day period by lodging an objection with the debt collection office. Such an objection will suspend the debt collection procedure, and the creditor will then have to apply to the competent court for a ruling confirming the validity of the claim.
If the debtor does not contest the claim within this period, or does not react at all to the payment order, the debt collection procedure continues towards the next steps, whether seizure of assets or bankruptcy, depending on the situation.
Opposition to an order to pay is an essential aspect of the Swiss debt collection procedure, enabling the debtor to formally contest the claim against him.
When a debtor receives a summons to pay, he has 10 days in which to lodge an objection with the debt collection office. This objection must be made in writing, but need not state the grounds or reasons for the dispute.
The immediate effect of the opposition is to suspend the legal proceedings. From that point on, the ball is in the creditor’s court to decide how to proceed. If the creditor wishes to continue the proceedings, he or she must obtain a writ of execution, usually by taking the case to court to rule on the validity of the claim. This can involve a full court procedure, with the presentation of evidence, arguments and, eventually, a judgment.
If the creditor does not take any steps to obtain a writ of execution within a given period (generally one year in Switzerland), opposition to the order to pay will result in cancellation of the proceedings.
The discharge procedure plays a crucial role in the Swiss debt collection system. It takes place when the debtor has objected to the payment order, and the creditor wishes to continue the procedure.
Discharge consists in lifting the debtor’s opposition, thus allowing the debt collection procedure to continue. There are two main types of release: provisional and final.
Provisional discharge can be requested by the creditor when the claim is based on a provisional discharge document, such as a signed IOU. The creditor must present this document to the discharge judge, who then decides whether the opposition should be provisionally lifted. If the debtor wishes to contest this decision, he must take legal action within a set time limit.
Final discharge is applicable when the creditor has a final judgment or other enforceable title against the debtor. The final release is granted automatically, and the pursuit can continue immediately.
The requisition to continue debt collection is a specific stage in the Swiss debt collection procedure, which follows the provisional or definitive release of a debtor who has lodged an objection to the order to pay.
This requisition must be filed by the creditor with the debt-collection office, usually within 30 days of obtaining a discharge. The deadline may vary depending on the situation, and a precise understanding of the applicable legislation is therefore necessary.
The requisition to continue proceedings is a formal declaration of the creditor’s intention to continue the collection process, despite the debtor’s initial opposition. It signals to the debt collection office that the creditor has either succeeded in lifting the opposition through a discharge procedure, or has obtained a favorable court judgment, and now wishes to proceed with the execution phase of the debt collection, either through seizure of the debtor’s assets or through bankruptcy proceedings.
If the creditor does not file this requisition within the required timeframe, the pursuit is considered closed, and the creditor loses his right of recovery in this specific pursuit.
Seizure execution represents the concrete collection phase in Swiss debt collection proceedings, where the debtor’s assets can be seized to satisfy the creditor’s claim.
Once the creditor has filed the requisition to continue the proceedings and all the preliminary stages have been completed without opposition, or the opposition has been lifted, the debt collection office can proceed with the seizure of the debtor’s assets.
The execution of a seizure is a delicate and strictly regulated procedure. It generally begins with the establishment of an inventory of the debtor’s seizable assets. These assets may include bank accounts, wages (within legal limits), real estate and valuables. Certain possessions essential to daily life are generally exempt from seizure to protect the debtor’s fundamental rights.
The seized goods are then sold, often by public auction. The proceeds of the sale are used to cover the costs of the lawsuit and then to reimburse the creditor. If the sale does not cover the entire debt, the creditor can continue to pursue the debtor’s other assets or income.
It should be noted that the execution of the seizure must be carried out with the utmost care and in accordance with current legislation. Failure to do so may result in the seizure being annulled and the debtor being entitled to legal recourse.
Realization is the final stage of the seizure procedure under Swiss debt collection law. It involves the sale of the seized goods and the distribution of the proceeds to satisfy the creditor’s claim.
Once the debtor’s assets have been properly inventoried and valued during the execution phase of the seizure, realization is organized. This stage involves transforming the seized assets into cash, usually by means of a public auction. There are strict rules governing how the sale is to be conducted, including proper notification, transparency and fairness in the sale process.
The proceeds of the sale are then used to cover the costs of the lawsuit, including those of the debt-collection office. What remains goes to the creditor to satisfy his claim.
If the proceeds of realization are insufficient to cover the entire claim, the creditor may continue the proceedings by seizing other assets or initiating new proceedings. Conversely, if the proceeds of realization exceed the claim and costs, the surplus is returned to the debtor.
Bankruptcy proceedings are a mechanism used in Switzerland to collect debts from insolvent debtors, whether natural or legal persons. The process is divided into several key stages, which are described below.
Once the creditor has issued a summons to pay and the time limit for opposition has expired (or the opposition has been lifted), he can ask the debt collection office to continue the proceedings. In the case of bankruptcy proceedings, this leads to the issue of a summons to pay.
If the debtor is a company, the debt collection office issues a summons to pay, requiring the debt to be paid within 20 days. If the debt is not paid within this period, bankruptcy may be declared.
If the debtor fails to pay on time, the creditor can ask the court to declare the debtor bankrupt. The declaration of bankruptcy opens bankruptcy proceedings, and a bankruptcy administrator is appointed to oversee the process.
The bankruptcy administrator is responsible for inventorying the debtor’s assets and selling them. The funds generated by the sale are used to pay creditors according to an order of priority defined by law.
After paying bankruptcy costs and secured claims, the remaining funds are distributed to unsecured creditors. Distribution is based on the order of priority and the amount of claims.
Bankruptcy proceedings are closed when all assets have been realized and funds distributed to creditors. If any funds remain after all claims have been paid, they are returned to the debtor.