Realization

Switzerland, with its rigorous and complex legal system, places particular importance on debt collection law. This area of law governs how a creditor can legally claim an unpaid debt from a debtor. It reflects a delicate balance between recovering the amounts owed and the debtor’s right to fair treatment.

Realization, a key phase of the debt collection process, involves the sale of the debtor’s seized assets so that funds can be distributed to the creditor. As a crucial component of this process, it enables the transformation of assets into liquidity, thereby facilitating debt settlement. Understanding this stage is vital for everyone involved in the process, whether they are creditors, debtors, or legal professionals.

However, realization is not merely a mechanism for debt recovery. It must be conducted with fairness and transparency, framed by strict rules that protect the interests of all parties. In Switzerland, realization contributes to maintaining trust in the legal and financial system by ensuring that the law is applied consistently and fairly.

The legal framework of realization in Switzerland is defined by key legislative texts, such as the Code of Obligations and the Federal Act on Debt Collection and Bankruptcy (FDCB). These laws establish the rules and procedures that must be followed, in addition to defining the rights and responsibilities of different parties. A deep understanding of this legal framework is essential to grasp how realization functions in practice in the Swiss legal system, and why it is structured in this manner. This legal foundation ensures that realization is carried out in compliance with principles of justice and equity, reflecting the deep values of the Swiss legal system.

Principles and roles in the realization procedure

Realization in Swiss law is guided by fundamental principles that serve to frame and direct the entire process. These principles include transparency, fairness, proportionality, and legality. Each of these principles plays a vital role in ensuring that realization is conducted justly and ethically. For example, the principle of transparency ensures that all involved parties have access to necessary information, while the principle of proportionality ensures that measures taken are appropriate to the situation.

The creditor, seeking to recover a debt, is an essential party in the realization process. Their role includes submitting a realization request to the competent Debt Collection Office, collaborating with authorities to provide necessary information, and adhering to relevant laws and regulations. The creditor must act in good faith throughout the process and strive to protect their rights while respecting those of the debtor.

The debtor, on their part, also has a clearly defined role in realization. They must cooperate with the Debt Collection Office and provide all required information. In Switzerland, the debtor has the right to contest the validity of the debt and request payment extensions. They can also assert their rights to protect certain assets from seizure. Understanding and exercising these rights are crucial for the debtor.

The Debt Collection Office plays a central role in realization. It is responsible for implementing the realization procedure, including notifying parties, seizing assets, selling these assets, and distributing funds. The Office must act impartially and in strict accordance with the law. Its conduct must reflect the fundamental principles of realization, and it must closely collaborate with creditors, debtors, and other actors in the legal system.

Methods of realization: movable assets

The realization of movable assets in Swiss debt collection law is a detailed procedure that requires particular attention to many aspects. In Switzerland, movable assets include items such as furniture, vehicles, household appliances, and other goods that can be moved without being damaged.

The first step in the realization of movable assets is the assessment of the assets. This assessment must be performed by a qualified professional who determines the market value of the goods. The assessment must be accurate and reflect the real value of the goods on the current market. This is essential to ensure that the sale of the assets is conducted at a fair price, protecting the interests of both the creditor and the debtor.

Next, the seizure of movable assets is carried out. This step is conducted by the Debt Collection Office and must be executed in accordance with the law. The seizure must be carefully documented, and all seized assets must be described in detail. This is vital to ensure the transparency and fairness of the process.

After seizure, the assets are sold. The sale can be conducted through public auctions or other methods approved by law. The auctions must be publicly announced, and anyone interested should have the opportunity to participate. This ensures that the sale is conducted in an open and transparent manner and also allows for the best possible price for the assets.

The distribution of funds obtained from the sale is the final step in the process. These funds are used to pay creditors, following the order of priority established by law. If funds remain after all creditors have been paid, they are returned to the debtor. This step must be carried out with care, respecting the rights of all involved parties.

Methods of realization: real estate

The realization of real estate, such as land, houses, and commercial buildings, is a legally complex and multifaceted process that requires specialized expertise.

The assessment of real estate is the first step in the realization process. It must be performed by an expert in real estate valuation who considers various factors, such as location, size, condition of the property, and market conditions. This assessment must be conducted accurately and with integrity, adhering to professional and legal standards, to ensure that the sale price reflects the fair and current market value of the property.

After the assessment, the announcement of the sale is a critical step. In Switzerland, sales of seized real estate are usually conducted through public auctions. The announcement must include all relevant information about the property and be published in a way that reaches a broad audience of potential buyers. Transparency at this phase is crucial to ensure that the sale reaches a wide audience and allows interested parties to have all the necessary information to participate.

The sale itself must be conducted in accordance with the law and applicable regulations. The auctions must be conducted openly and fairly, with all bids being made publicly. This ensures that the property is sold at the highest possible price on the open market, protecting the interests of creditors and ensuring that the debtor receives fair treatment.

After the sale, the distribution of funds is carried out in compliance with the law. Creditors are paid according to the order of priority defined by Swiss law, and if funds remain after all creditors have been satisfied, they are returned to the debtor. This step must be conducted with care and precision, ensuring that all legal rights are respected and that funds are distributed equitably.

In conclusion, the realization of real estate in Swiss debt collection law is a complex process that requires expertise and attention to detail at each stage. From assessment to distribution, every aspect must be conducted in compliance with the law, focusing on transparency, fairness, and integrity. This reflects Switzerland’s ongoing commitment to maintaining a legal system that balances the interests of creditors and debtors, while protecting principles of justice and good governance.

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PBM Avocats in Geneva

Boulevard Georges-Favon 26

1204 Genève

T. : +41 22 348 32 35