If you’re a creditor with a debtor in Switzerland and need a basic understanding of the Swiss debt enforcement process, this guide is for you.
Legal Foundations And The Competent Authorities
Debt recovery and the enforcement of monetary collateral in Switzerland are governed by the Federal Act on Debt Enforcement and Bankruptcy (DEBA). The process involves two main authorities: the Debt Enforcement and Bankruptcy Office (DEBO) and the Civil Court.
The debt enforcement in Switzerland unfolds in two phases: the introductory proceedings and the enforcement proceedings.
Starting the Process: Filing a Debt Collection Request
To begin, the creditor files a debt collection request with the DEBO where the debtor is based or where their assets are located. At this stage, no proof of the debt’s validity is required. Once the request is filed, the DEBO issues a payment order to the debtor, allowing the creditor to proceed with enforcement within one year. Interesting fact: the Swiss DEBOs issue around 2.7 million payment orders each year.
After receiving the payment order, the debtor has ten days to lodge an objection with the DEBO, either verbally or in writing. If no objection is filed, the creditor can proceed by requesting the DEBO to continue the enforcement process.
Handling Objections
If the debtor objects, the debt collection process pauses, and the creditor will need a court order to override the objection. This requires either a definitive or provisional dismissal of the debtor’s objection, depending on the claim's basis.
Definitive dismissal is available for claims backed by an enforceable court decision, arbitration award, or certain official documents.
Provisional dismissal may apply to claims based on a signed debt recognition, allowing the process to proceed unless the debtor challenges it in civil court within a specified timeframe.
If the debt lacks these special titles, a regular civil court process is needed to override the objection.
Enforcement Proceedings: Bankruptcy, Asset Seizure, or Pledged Property Auction
Once the objection is dismissed (or if none was filed), enforcement proceedings can begin. The type of enforcement depends on the debtor's status and the nature of the debt:
Bankruptcy Proceedings: If the debtor is a registered business, the case proceeds via bankruptcy, where all assets are liquidated, and creditors are paid from the proceeds.
Debt Collection by Realizing Pledged Property: For debts secured by a pledge or mortgage, the DEBO may seize and auction the pledged property.
Debt Collection by Seizing Assets: If the debtor is an individual and the debt is unsecured, the DEBO can seize personal assets and auction them. Certain essentials, such as future salary payments needed for a minimum standard of living, remain protected.
At Advokatur GTK, we support creditors at every step of the debt recovery process, from initial filing to enforcement proceedings.