Author: Lawyer Enrico Germano

The latest 2020 figures announced by the Federal Statistical Office show that almost one in seven (13.5%) people in Switzerland live in a household with at least one payment arrears. In 2020, 5.1% of the Swiss population will live in a household in which enforcement proceedings have been initiated or a certificate of shortfall has already been issued. Overall, 6.9% of the population live in a household that has been subject to at least one enforcement proceedings in the last 12 months or has had at least one certificate of shortfall issued against it .

The obvious difference between payment arrears and enforcement proceedings lies in the fact that a person may find himself in temporary difficulty in honouring his invoices or debts and that he will pay later, even in instalment payments, after several reminders and various reminders from the creditor, without an enforcement proceedings having been commenced, whereas the commencement of an enforcement proceedings is already a concrete sign of serious difficulties on the part of the potential debtor in being able to pay the arrears or is an indication of his manifestation of willingness to dispute those arrears and that he does not intend to pay them.

After the reminder, the creditor has the option under Art. 102 of the Federal Act on the Amendment of the Swiss Civil Code (The Code of Obligations) to default by summoning the debtor. Once the period – of approx. 10 days – of the debtor’s default notice has expired unsuccessfully, the creditor then has the option of initiating enforcement proceedings to recover its claim. In fact, the enforcement proceedings is the procedure that allows the enforcement of individual creditor claims in Switzerland pursuant to the Federal Act on Debt Enforcement and Bankruptcy (DEBA). Creditor and debtor are the terms used in the DEBA for the enforcing party and the enforced party in the enforcement proceedings:

« Enforcement is initiated by sending an application for enforcement to the enforcement office. This office arranges for an enforcement order to be served on the debtor. The enforcement notice contains an order to pay the specified claim with interest and enforcement costs to the creditor or the enforcement office within 20 days.may 2nd  The debtor has the right to object within 10 days of service of the enforcement order. Consequently, enforcement can only continue if the opposition has been rejected by a court decision (opposition rejection decision). If no opposition has been lodged or if it has been rejected by a judicial decision rejecting the opposition, the creditor may after 20 days, but at the latest within one year, request the continuation of enforcement and thus enforcement will continue its course ». The judicial decision is made through the Court of first instance with territorial jurisdiction for amounts exceeding CHF 5,000.– while it is the Justice of the peace with territorial jurisdiction who decides for amounts below CHF 5,000.–.

The continuation of enforcement is enshrined in arts. 88 et seq. of the DEBA and provides for three modes of enforcement. That by way of bankruptcy for legal entities and that by way of attachment for natural persons. For claims secured by pledge, enforcement by realisation of the pledge is provided for.

For natural persons, the debt enforcement office may order the debtor’s employer to pay the attachable part of his future salary directly to the office, and it is also possible to seize valuables belonging to the debtor in order to sell them at auction. Pursuant to Art. 149 of the DEBA, the attachment creditor receives a certificate of shortfall of assets for the outstanding amount of his claim, which is prescribed in 20 years. Within 6 months of receipt of this certificate, the creditor may continue the execution without the need to file a new enforcement order against the debtor.

3; Conferenza degli ufficiali di esecuzione e fallimenti della Svizzera; Conferenza degli ufficiali di esecuzione e fallimenti della Svizzera