18 January 2022

Moving to Switzerland - Excerpt from the debt collection register as key to concluding contracts?

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Sooner or later, anyone moving to Switzerland will be confronted with a request for an extract from the debt collection register (“Betreibungsregisterauszug”). This document is regularly requested when applying for rented accommodation and sometimes also when applying for a job. What is it all about?

The background is to be found in the Swiss system for the collection of debts. If a debt is outstanding and unpaid, a creditor has the option of submitting a so-called enforcement request against a debtor domiciled in Switzerland (and in certain cases also if domiciled abroad). This consists of a form on which the personal details of the debtor and creditor, the amount of the claim and the reason for the claim must be stated. This form can then be submitted to the competent debt collection office - usually at the debtor's place of residence.

It is possible, but not necessary, to enclose evidence of the debt being enforced with the request. Irrespective of whether supporting documents are submitted, the debt collection office does not check whether the claim is founded.

If the debt collection request is formally correct, the debt collection office sends the debtor the summons to pay (“Zahlungsbefehl”). By means of the summons to pay, the debtor is requested to pay the debt within 20 days. If the debtor fails to do so, the creditor is threatened with the right to continue the debt collection proceedings.

The debtor who is served with the summons to pay has the right to inspect the documents relating to the claim, if the creditor has submitted such documents. If the debtor is of the opinion that the claim does not exist, he can file an objection (“Rechtsvorschlag”). This can be done very simply - either orally or in writing - to the debt collection office. The deadline for this is 10 days from the date of service of the summons to pay.

The creditor receives a duplicate of the summons to pay and is informed whether the debtor has lodged an objection

If the debtor raises an objection, the ball is back in the debtor's court. The debtor must make an active effort to eliminate the objection. This must be done through court proceedings, whereby the type of proceedings depends on what evidence is available for the claim. Only when the objection has been removed by a court can the creditor file the so-called request for continuation (“Fortsetzungsbegehren”) and thus continue the enforcement. After the request for continuation has been filed, the debt collection office either seizes the debtor's assets or initiates bankruptcy proceedings against the debtor. Which course is taken depends on who the debtor is (rule of thumb: private individuals are seized, legal entities are declared bankrupt). In the course of the further proceedings, the debtor's assets are realized and the creditor's claim is settled from the proceeds of the realization. The exact course of the proceedings depends on various factors and will not be discussed in detail in this article.

If the debtor does not raise an objection or misses the deadline of 10 days, the creditor can directly file a request for continuation after the expiry of 20 days from the service of the summons to pay, whereupon the enforcement takes its course as described above. There is no need for court proceedings.

Each of the above-mentioned steps (enforcement request, service of the summons to pay, objection, request for continuation, etc.) is recorded by the debt collection office and thus enters the debtor's debt collection register. If an excerpt from the debt collection register is requested, it will indicate the creditor, the amount of the claim and the procedural steps. The debt collection register can therefore provide a third party with information about a person's creditworthiness and reliability.

This system is problematic when it is exploited. Since payment orders are issued without examining the claim and without submitting supporting documents, as well as in view of the relatively low fees for the actions of the debt collection office, unfounded debt collection proceedings are sometimes initiated, which are then inconvenient or disadvantageous for the person being pursued because of the entry in the register.

To counteract these disadvantages, it is possible to request the debt collection office not to disclose the debt collection to third parties after a period of three months has elapsed since the service of the summons to pay, provided that the debtor has raised an objection. The debt collection office will then clarify with the creditor whether he has taken legal action to remove the objection. If he has not done so, this debt collection will no longer appear in any extract from the debt collection register. It will only appear again if the creditor initiates legal proceedings at a later date and informs the debt collection office accordingly.