Debt enforcement proceedings are a type of enforcement procedure through which a creditor asserts a monetary claim or security against a debtor. The debtor can raise an objection and thereby bring the enforcement proceedings to a temporary halt.
Initiation of enforcement
Enforcement request
Enforcement is initiated by filing an enforcement request. The creditor submits an enforcement request against a debtor to the competent enforcement office. The enforcement request must specify the creditor, the debtor, the claim, and the interest.
Place of enforcement
Enforcement is generally initiated at the debtor’s place of residence. Legal entities and partnerships registered in the commercial register are enforced at their registered office, while unregistered legal entities are enforced at the main office of their administration.
Other places of enforcement:
- Condominium ownership community: at the location of the property
- Debtors without a fixed place of residence: at their whereabouts
- Inheritances: at the enforcement place of the deceased, as long as the division has not taken place, no contractual community has been formed, or no official liquidation has been ordered
- Debtors with a residence abroad: at their business establishment in Switzerland for business-related claims
- Claims secured by lien or pledge: at the location of the secured asset
- Attachment: at the place of attachment
- Change of residence: the previous place of enforcement remains in effect if the seizure has already been announced or bankruptcy has already been threatened.
Payment order
The enforcement office issues a payment order based on the enforcement request and serves it to the debtor. The payment order contains the creditor’s information regarding the claim and notifies the debtor of the opportunity and deadline to raise an objection. The payment order also includes a notice to the debtor that they can request the submission of evidence for the creditor’s claim.
Objection
Raising an objection
The debtor can raise an objection against the enforcement. The objection is considered a denial of the claim. The objection can pertain to the entire amount or a portion of the amount being enforced (partial objection). In the case of a partial objection, the debtor must pay the undisputed amount, otherwise, the creditor can request the continuation of the enforcement for that portion.
The debtor does not need a specific reason to raise an objection. However, reasons may include:
- The debt no longer exists (debt settled)
- The debt does not exist in the amount being enforced (possibly a partial objection)
- The claim is not yet due
- The claim is deferred
- The debt never existed in the first place (unjustified enforcement)
- etc.
The objection is usually raised by the debtor personally. It is also possible to raise the objection with a power of attorney or by an unauthorized person (agency without authority).
The deadline for raising the objection is ten days from the receipt of the payment order. The objection can be made orally or by phone to the enforcement officer. The debtor can also raise the objection in writing by sending a letter to the enforcement office or by making a note on the payment order. In the case of a change of creditor during the enforcement proceedings, a subsequent objection is possible (art. 77 DEBA).
Withdrawal of objection
The debtor can withdraw the objection. They may be willing to do so if the claim is valid and due. Withdrawing the objection relieves the debtor of the additional costs imposed on them if the creditor has to eliminate the objection through a legal process. If the debtor is unable to do so, an instalment payment agreement can be reached, and the objection can be withdrawn simultaneously.
Elimination of objection
If the debtor has raised an objection, the creditor has various options to have the objection eliminated.
If the creditor has an enforceable title, they can file a request to set aside the objection with the competent court.
If the creditor does not have an enforceable title, they must have the objection eliminated through a conventional lawsuit.
In certain cases, the objection can also be set aside in an administrative procedure. For example, with health insurance companies and Serafe Ltd. have the authority to do so.
Continuation request
Payment deadline
If no objection is raised or the objection is eliminated, the debtor has 20 days to settle the claim. If the debtor does not pay, the creditor can file a continuation request.
Seizure enforcement
If the debtor is not registered in the commercial register and the claim is not secured by a pledge, it is a seizure enforcement, and the enforcement is continued through seizure of assets or income of the debtor. The enforcement office serves the debtor with a seizure notice.
Bankruptcy enforcement
If the debtor is registered in the commercial register, the debtor is served with a bankruptcy threat, granting a final deadline of 20 days to settle the claim. If the debtor does not pay, the creditor can file a bankruptcy petition with the competent court.
Enforcement through pledge realization
If the claim being enforced is secured by a pledge, the enforcement is continued through the realization of the pledge, regardless of whether the debtor is registered in the commercial register or not.
Validity period of the payment order
The payment order is valid for a period of twelve months from the date of service and entitles the creditor to file a request for continuing the enforcement proceedings during this period (art. 88 para. 2 DEBA). This period is suspended between the objection to the claim and the final removal of the objection, i.e., during the duration of proceedings to set aside the objection of the debtor (art. 80 to 84 DEBA) or a recognition action (art. 79 DEBA).
In the case of enforcement in bankruptcy, the validity period of the payment order is extended by three months to a total of fifteen months upon filing a request for continuing the enforcement proceedings. During this period, the creditor can initiate bankruptcy proceedings (Article 166 SchKG).
If the creditor fails to timely file the request for continuation or the bankruptcy request, the payment order expires. The creditor must initiate a new enforcement procedure to assert their claim. However, the costs associated with the expired payment order cannot be charged to the debtor.
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In-Depth Information
