Betreibung – Debt Collection in Switzerland

Following Swiss law, the procedure for enforcing the monetary debt recovery falls under the jurisdiction of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA) – Bundesgesetz über Schuldbetreibung und Konkurs (SchKG) of April 11, 1889 (281.1).

For the enforcement of any other type of claim, Swiss regulations refer to title 10 of the Swiss Civil Procedure Code (CPC), established on December 19, 2008 (272).

The enforcement procedure is uniform throughout Switzerland, but the language used may vary depending on the Canton.

Forced execution in Switzerland can be attributed to a state function, and in certain aspects, it resembles police activities.

The Swiss system for determining competence in forced execution matters is complex.

The responsibility to collect debts lies with specialised administrative authorities found in each Canton, namely, the Debt Collection Office (Betreibungsamt) and the Bankruptcy Office (Konkursamt). Appeals against decisions made by these authorities can be brought before the supervisory authority (Aufsichtsbehörde) as per Article 17 of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA).

There are instances where forced execution is not overseen by administrative authorities but falls under the jurisdiction of civil courts or a county court. In this regard, it's crucial to distinguish between three distinct situations:

The standard procedure for initiating a process of debt recovery begins with the preliminary phase, known as the " Vorbereitungsverfahren." This phase falls between the debt collection request (Betreibungsgesuch) as defined in Article 67 of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA) and the request for continuation (Gesuch um Fortsetzung der Betreibung) under Article 88 of the DEBA.

This phase operates under two fundamental principles, with enforcement actions being carried out exclusively by the Debt Collection Office (Betreibungsamt). The original creditor doesn't have the authority to execute or serve notices during this phase:

The Burden of Initiative Progress in the procedure does not happen automatically; it requires proactive steps from the creditor at each stage. Initially, this involves a declaration of intent directed to the Debt Collection Office.

The Burden of Reaction The debtor can halt the procedure by lodging an objection (opposition). This objection, also a declaration of intent, places the creditor's responsibility to substantiate the claim's validity before a state judge or an arbitration court. If the debtor takes no action, the procedure proceeds automatically.

Regarding proceedings to dismiss a debtor's objection (Verfahren zur Beseitigung des Rechtsvorschlags), the fees to be advanced range between CHF 50 and CHF 300 for claims valued between CHF 1,000 to CHF 10,000; CHF 60 and CHF 500 for claims valued between CHF 10,001 to CHF 100,000; CHF 70 and CHF 1,000 for claims valued between CHF 100,001 to CHF 10,000,000; and CHF 120 and CHF 2,000 for claims exceeding this value (as per Article 48 of FODEBA) as presented in the table below.

The creditor's advanced fees for enforcing the debt are added to the debt itself and will be reimbursed upon the collecting of funds.

The debt collection procedure begins with the submission of a debt collection request, known as "Betreibungsbegehren" (usually in the form of a document provided by the creditor) to the Debt Collection Office located at the place of enforcement, as per Article 46ss of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA).

This debt collection request must contain specific information, including the name and address of the debtor, the debt's value, the reason for the debt, and any accrued interest. The debt's value must be expressed in Swiss Francs, even if it was originally in a foreign currency.

The Debt Collection Office does not assess the validity of the debt claimed by the original creditor; this authority lies with the state judge or an arbitration court.

It does not constitute an unlawful attack on the personal rights of the debtor, as it is legally justified and serves the creditor's legitimate interests. Abuse of law by the creditor typically applies in cases where the goal is to harm the reputation of the debtor with an obviously groundless debt.

The Debt Collection Office notifies the debtor with a summons to pay, requiring them to settle the indicated sum within 20 days.

The timeframe for serving the summons to pay varies by Canton but is usually one or two months.

Typically, procedures on the merits progress in parallel with the initial stages of debt recovery, allowing the creditor to proceed without waiting for a judgment confirming the debt's existence after receiving notice of the summons to pay.

The debtors usually have three options: a debtor pays the full amount with interest within the given time frame (leading to suspension and removal of the procedure upon the creditor's request), takes no action (allowing the creditor to request continuation after a 20-day waiting period), or files an objection notice within ten days of notification.

Filing an objection notice doesn't imply debt acceptance. The creditor must obtain a court order affirming the debtor's debt, known as "Rechtsvorschlag erheben." Failure by the creditor to initiate proceedings to dismiss the objection of the debtor within one year of the summons to pay being served results in the lapse of enforcement, as per Article 88 of the DEBA.

When the creditor has rejected the debtor's objection, the debt collection procedure can only proceed if the creditor submits a request for continuation.

As previously mentioned, Swiss law governing forced execution is distinctive in that it allows anyone to enforce a debt without the need for official authority or prior court verification of the debt's validity.

In rare instances, individuals may submit malicious, trivial, or blatantly abusive debt enforcement requests with the sole intention of recording a non-existent debt in the Debt Collection Register. This publicises the fictitious debt and seriously damages the debtor's financial reputation.

Furthermore, even when a summons to pay becomes invalid due to the expiration of the relevant time period, the enforcement record remains in the Debt Collection Register in Switzerland for five years. The same applies when a summons to pay has been resolved and marked as "paid," unless the creditor revokes the enforcement.

Abusive enforcement actions can lead to criminal complaints for coercion under Article 181 of the Swiss Criminal Code.

As part of the December 16, 2016 amendment to Article 8a of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA), the legislator introduced a new mechanism allowing victims of unjustified enforcement actions to prevent them from being publicly listed in Debt Collection Register Extracts.

Creditors have the right to obtain an extract or Betreibungsauszug from the Debt Collection Register (Betreibungsregister). This document provides a detailed overview of a debtor's outstanding debts, ongoing debt collection proceedings, and any defaults. Creditors use this information to make informed decisions about whether to extend credit or enter into financial agreements with debtors.

A debt collection agency may report delinquent debts to credit reporting agencies, which can impact the debtor's credit score and credit history. This serves as an additional incentive for debtors to settle their outstanding debts.