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Stricter Measures Against Abusive Bankruptcies

8 November 2023 | Legal Alerts
The Federal Assembly passed the Federal Act on Combating Abusive Bankruptcy in March 2022. The law on combating abusive bankruptcy includes amendments to several laws, namely the Code of Obligations (CO), the Debt Enforcement and Bankruptcy Act (SchKG), the Criminal Code (SCC), and the Federal Direct Federal Tax Act (DBG). The Federal Council brought the various legislative and ordinance amendments into force on January 1, 2025. These include the amendment to Art. 43 SchKG, according to which claims under public law are now also subject to bankruptcy proceedings.

Bankruptcy Investigation

In the spring session of 2022, the National Council and the Council of States approved provisions to prevent abusive bankruptcies. Now, the public sector must also pursue companies for bankruptcy.

Ten years ago, parliament demanded that the Federal Council take action against abusive bankruptcies. The Federal Council proposed legislation in 2015. In 2019, it was dispatched to parliament.

It listed various sanctions in criminal law, the Code of Obligations and debt enforcement, and bankruptcy law with which it wanted to prevent a company from getting rid of its debts through bankruptcy. The National Council and the Council of States approved the new provisions.

Key Provisions

The key provisions of the legal reforms effective from January 1, 2025, include:
  • 1

    1. Stricter Eligibility Criteria

    Debtors seeking insolvency proceedings must meet stricter eligibility criteria, focusing on preventing frivolous bankruptcy filings. Debtors will need to demonstrate that they genuinely face financial distress and their financial situation warrants insolvency proceedings.
  • 2

    2. Enhanced Scrutiny

    The insolvency authorities will conduct more thorough assessments of bankruptcy applications to determine their legitimacy. Debtors may be subject to increased scrutiny of their financial records and conduct leading up to insolvency.
  • 3

    3. Sanctions for Abusive Filings

    Harsher penalties will be imposed on individuals and businesses found to have engaged in abusive bankruptcies. Abusive bankruptcy filers may face fines, criminal charges, or other sanctions.
  • 4

    4. Tightened Regulations for Company Officers

    Company officers, directors, and board members may be held more accountable for facilitating abusive bankruptcies. There may be legal consequences for individuals who misuse insolvency proceedings to benefit themselves or others at the expense of creditors.
Stay informed and monitor regulatory updates related to abusive bankruptcy. Inform your members about these changes in good time so that they can make appropriate arrangements.


In future, debtors should no longer be able to use abusive bankruptcy to get rid of their financial obligations, such as wage payments, and thus harm other persons. Public law claims are to be pursued in bankruptcy according to the general rules, and bankruptcy proceedings are no longer to be used to compete unfairly with other companies. The amendments to the law entail adjustments to various ordinances, specifically the Commercial Register Ordinance (HRegV) and the Ordinance on the Criminal Register Information System VOSTRA (StReV).
For specific legal advice or assistance, please consult a qualified attorney familiar with Swiss consumer protection and environmental regulations.

1. https://www.parlament.ch/en
2. https://www.fedlex.admin.ch/eli/cc/27/317_321_377/en
3. https://www.fedlex.admin.ch/eli/cc/11/529_488_529/de
4. https://www.fedlex.admin.ch/eli/cc/11/529_488_529/de#fn-d8e16


This legal alert provides a general overview of the topic and should not be considered legal advice. Legal situations may vary, and businesses should consult with legal professionals to address their specific concerns.
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