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Dari Podhur

1 December 2023

14 min

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Table of contents

Debt recovery and debt collection in Switzerland – Legal Framework

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Debt collection office - betreibungsamt

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Debt collection agency

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Debt collection costs

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The procedure of debt collection

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Contact information for debt collection offices in Switzerland

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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)

Introduction

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

The debt recovery
process under Swiss law

The debt recovery process under Swiss law is unique in that forced execution can begin based solely on claims made by the creditor, without needing supporting documentary evidence. This means
that the claimant doesn't need any specific legal documents, such
as a civil judgment, arbitration award, administrative decision,
or acknowledgment of debt, to initiate the debt collection process

Initiating debt recovery

Debtors can quickly halt the legal proceedings started by the creditor by submitting an objection to the summons to pay, referred
to as an "Opposition gegen den Zahlungsbefehl." This objection
gives the debtor an opportunity to challenge the claim, thus
stopping the process temporarily

Debtor's right to object

Interestingly, even with solid documentary evidence, creditors
must go through the initial debt recovery phase. The only legally
recognized instrument allowing for asset seizure or declaring
the debtor's insolvency is an enforceable summons to pay, known
as a "Zahlungsbefehl." Other documents don't hold legal standing
for this purpose, except in unique and specific situations

No legal instruments required

To continue with the enforcement process, creditors must take additional steps to lift the objection, known as "Rechtsvorschlag aufheben." This is necessary for the enforcement to proceed
and for creditors to recover their debts effectively

Lifting the objection

Competent organisations:
debt collection office
and debt collection agencies

Forced execution in Switzerland is considered a state function
and in some respects, it resembles police activities. The Swiss
system for determining competence in matters of forced execution
is intricate. Debt collection responsibilities are assigned to specialized administrative authorities within each Canton, specifically the Debt Collection Office (Betreibungsamt) and the Bankruptcy Office (Konkursamt). Decisions made by these authorities can be appealed
to the supervisory authority (Aufsichtsbehörde) under Article 17
of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA). This ensures a structured process for addressing disputes
and overseeing the enforcement of debt collection

In cases of significant importance and far-reaching consequences,
a civil judge may step in to replace the administrative authorities.
The judge renders decisions instead of judgments and acts
as an enforcement body. This scenario commonly arises in matters
like insolvency declarations, where the judge's jurisdiction
is mandatory and not subject to alteration by the involved
parties in accordance with Swiss national law

Judicial intervention

However, certain cases of forced execution are handled
not by administrative authorities but by civil courts or a county
court, necessitating a distinction between three specific situations.
These situations involve different legal frameworks and procedures, making it essential to understand the particular circumstances
under which each applies. In such instances, the role of the courts
is crucial in ensuring that forced execution is conducted fairly
and in accordance with the law, highlighting the complexity
and thoroughness of the Swiss legal system in handling debt recovery

Swiss judges may be tasked with resolving procedural matters when one party raises an objection to the continuation of enforcement. Some judgments pertain solely to procedural enforcement law matters, such as the definitive lifting of an objection, while others touch on substantive enforcement law issues, like the provisional lifting of an objection. The judge's jurisdiction in these cases is also mandatory and established by Swiss national law unless overridden
by international agreements, such as the Lugano Convention
of September 30, 2007 (SR 0.275.12)

Procedural issues

In certain scenarios, judges must adjudicate proceedings based
on the merits, separate from forced execution law, but essential
to resolving substantive legal disputes. Until these issues are resolved, enforcement cannot proceed due to the uncertainties they create. Typical cases in this category involve actions for recognising and discharging debt, as outlined in Article 79 and Article 83 of the DEBA

Proceedings on the merits

In such instances, the judge's authority is determined
by the contracting parties' intentions, such as a choice of court
clause, along with applicable international and national laws.
The judge's competence is essential to ensure that the legal proceedings are conducted fairly and in accordance
with established legal principles

A debt collection agency is a private, third-party company
or organisation hired by creditors to collect outstanding debts
on their behalf. Debt collection agencies specialise in debt recovery and may use various methods, such as sending collection letters, making phone calls, and negotiating repayment plans with debtors

Debt recovery agents

Debt collectors are individuals or employees of debt collection agencies who are hired or tasked with the responsibility of collecting outstanding debts on behalf of creditors. Debt collectors
in Switzerland perform various functions aimed at recovering outstanding debt on behalf of creditors while adhering to Swiss
legal regulations and ethical practices

Debt collection duties

The primary role of a debt collector is to recover overdue
or delinquent debts from debtors. This involves contacting debtors, communicating the debt status, and working to secure payment. Debt collectors review and verify the validity of debts. A debt collector confirms the accuracy of the debt details, including the amount owed, debtor information, and the legitimacy of the debt documentation

Regulated debt recovery

A debt collection agency operates as a business and typically
charges fees or commissions based on the amount of debt collected.
A debt collection agency is a subject to regulations and laws governing debt collection practices to ensure fair and ethical treatment of debtors. Debt collection agencies in Switzerland
play a crucial rolein assisting creditors with the recovery of debts

The process
of debt recovery

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 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

The debtor has the ability to halt the procedure by lodging
an objection (opposition). This objection, also a formal declaration
of intent, shifts the burden to the creditor to substantiate the claim's validity before a state judge or an arbitration court. If the debtor does not take this action, the procedure continues automatically without further intervention

The burden of reaction

Progress in the procedure doesn't occur automatically; it requires proactive steps from the creditor at each stage. Initially, this involves the creditor making a formal declaration of intent to the Debt Collection Office. This step is crucial to move the process forward
and ensure that the claim is officially recognized and addressed
by the authorities

The burden of initiative

Firstly, the process of collecting debts typically commences
at the place of domicile or registered office of the debtor.
This location is referred to as the "place of enforcement" (Betreibungsort) under Article 46 of the DEBA

It's essential to distinguish this from the "place of jurisdiction" (Gerichtsstand), which determines the judge's competence
for material judicial decisions. Therefore, careful attention must
be paid to determine where and what actions need to be taken

Secondly, creditors residing or headquartered abroad must
choose a domicile at the office of a professional representative
in Switzerland. If they fail to do so, notifications will be sent
to the headquarters of the Debt Collection Office (Betreibungsamt), which could impact the adherence to time limits

Each step in the debt collection procedure must follow strict
time limits. If these limits are not observed, the entire process
can be invalidated. This underscores the importance of appointing
a Swiss representative to ensure compliance with all procedural deadlines

Finally, the creditor initiating the process is responsible
for covering the costs associated with it

The fees for the procedure are defined by the Fees Ordinance of the Swiss Federal Act on Debt Enforcement and Bankruptcy (FODEBA)

The fee for drafting a summons
to pay varies depending on the debt’s value

For proceedings to dismiss a debtor's objection (Verfahren zur Beseitigung des Rechtsvorschlags), the advanced fees depend
on the claim value. For claims between CHF 1,000 and CHF 10,000, the fees range from CHF 50 to CHF 300. For claims between CHF 10,001 and CHF 100,000, the fees range from CHF 60 to CHF 500

For claims between CHF 100,001 and CHF 10,000,000, the advanced fees range from CHF 70 to CHF 1,000. For claims exceeding CHF 10,000,000, the fees range from CHF 120 to CHF 2,000, as specified in Article 48 of FODEBA

For claims valued between CHF 1,000 to CHF 10,000

The process of debt recovery

For instance

The fee CHF 90: for debts between CHF 10 000 and CHF 100 000

The fee CHF 190: for debts between CHF 100 001 and CHF 1 000 000

Claims value

The fees to dismiss a debtor's objection

Range between CHF 50 and CHF 300

For claims valued between CHF 10,001 to CHF 100,000

Range between CHF 60 and CHF 500

For claims valued between CHF 100,001 to CHF 10,000,000

Range between CHF 70 and CHF 1,000

For claims exceeding this value

Range between CHF 120 and CHF 2,000

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 process starts with the submission of a debt collection request, known as "Betreibungsbegehren," usually
provided by the creditor, to the Debt Collection Office at the place
of enforcement, as stipulated in Article 46ss of the Swiss Federal
Act on Debt Enforcement and Bankruptcy (DEBA). This initial step
is crucial to formally initiate the debt recovery process

Debt recording

It compels the Debt Collection Office (Betreibungsamt)
to record the debt in the Debt Collection Register (Betreibungsregister), as stipulated in Article 8 of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA)

In this scenario, the time limit for the debt's statute
of limitations is interrupted, following Article 135 of the Swiss Code of Obligations (CO) dated March 30, 1911 (CO)

Time bar interruption

The request must include the debtor's name and address, the debt's value in Swiss Francs, the reason for the debt, and any accrued interest. The Debt Collection Office does not verify the debt's validity; this responsibility lies with the state judge or an arbitration court

Submitting a debt collection
request has two key effects

Debtors have three options: pay the full amount with interest within the given timeframe, take no action (allowing the creditor to request continuation after a 20-day waiting period), or file an objection notice within ten days. Filing an objection does not imply debt acceptance. The creditor must obtain a court order affirming the debt, known
as "Rechtsvorschlag erheben." If the creditor fails to dismiss
the debtor's objection within one year of the summons being served, enforcement lapses, as per Article 88 of the DEBA. The debt collection procedure can only proceed if the creditor requests continuation
after rejecting the objection

Debtor's options and creditor's actions

Debt collection actions do not unlawfully attack the debtor's personal rights, as they are legally justified and serve the creditor's legitimate interests. Abuse of law by the creditor occurs when the aim
is to damage the debtor's reputation with a baseless debt. The Debt Collection Office notifies the debtor with a summons to pay, requiring payment within 20 days. The timeframe for serving the summons varies by Canton but is usually one or two months. Procedures
on the merits often progress alongside the initial debt recovery stages, allowing the creditor to proceed without a judgment confirming the debt's existence after receiving the summons notice

Justified debt collection actions

Debt collection
transparency

Swiss law on forced execution is unique, allowing anyone to enforce
a debt without needing official authority or prior court validation.
In rare cases, individuals might file malicious or frivolous debt enforcement requests solely to record a fictitious debt in the Debt Collection Register, thereby damaging the debtor's financial reputation. Even when a payment summons expires, the enforcement record remains in the register for five years, unless the creditor withdraws the enforcement. Moreover, this publicises the fictitious debt, which can cause significant harm to the debtor’s financial standing and creditworthiness

Abusive enforcement can lead to criminal complaints for coercion under Article 181 of the Swiss Criminal Code. The December 2016 amendment to Article 8a of the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA) introduced a mechanism
to prevent unjustified enforcement actions from being publicly listed. Creditors can obtain a Betreibungsauszug, detailing a debtor's debts and ongoing proceedings, to make informed credit decisions. Debt collection agencies may report delinquencies to credit agencies, impacting the debtor's credit score and history, further incentivizing debt settlement

Here are contact details for some
of the debt collection offices in major Swiss cities

Swiss debt
office contacts

Debt collection office (betreibungsamt)

Address

Betreibungsamt Zürich Scheuchzerstrasse 1, 8006 Zürich

+41 44 248 99 11

Office des Poursuites et Faillites - Genève 8 Rue Ami-Lévrier, 1207 Geneva

+41 22 388 75 00

Betreibungsamt Bern Hodlerstrasse 7, 3001 Bern

+41 31 633 76 00

Betreibungsamt Basel-Stadt Hammerstrasse 13, 4001 Basel

+41 61 267 91 00

Betreibungsamt Luzern Hirschengraben 17, 6003 Lucerne

+41 41 228 56 56

Swiss debt
collection process

To sum it up, the debt recovery process under Swiss law is governed
by specific regulations, primarily the Swiss Federal Act on Debt Enforcement and Bankruptcy (DEBA) and the Swiss Civil Procedure Code (CPC) for non-monetary claims

Competent authorities in Switzerland for debt collection include
the Debt Collection Office (Betreibungsamt) and the Bankruptcy Office (Konkursamt), while civil courts may intervene in specific situations. Creditors may hire a debt collection agency - a private, third-party company or organisation that collects outstanding debts
on the behalf of creditors

The debt collection process comprises several phases, beginning
with a debt collection request and progressing through various steps, with specific time limits to adhere to

Swiss law addresses the issue of abusive or unjustified debt
recovery, which can harm a debtor's financial reputation.
There are mechanisms in place to prevent victims of such actions
from being publicly listed in Debt Collection Register Extracts

In Switzerland, creditors have the option to obtain an extract
from the Debt Collection Register (Betreibungsregister) to assess
a debtor's outstanding debts and proceedings, aiding them
in making informed financial decisions

Overall, Swiss debt recovery operates under a well-defined legal framework, ensuring fairness and transparency while balancing
the rights and responsibilities of both creditors and debtors

FAQ

Sources

Disclaimer

Legal disclaimer. This article does not constitute legal advice and does not establish
an attorney-client relationship. The article should be used for informational purposes only

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