Abstract
If a debtor fails to pay, knowing his assets is crucial to enforcing the debt. Finding these assets, however, can be a challenge. Swiss law offers some features with regard to the discovery of debtor’s assets as well as with regard to the enforcement of judgments and debts in general that are unique in comparative perspective. The result is a procedure that is quite efficient and effective at enforcing debts while also protecting the interests of the debtor. This contribution presents and analyzes these features of Swiss enforcement procedure and reproduces some statistical data that provide at least a general impression of how these procedures work in practice.
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Notes
- 1.
One potential interest of the debtor, the interest in a “fresh start” (see Marcus 2020), is, however, protected in only a very limited fashion. Unless the debtor can negotiate such a fresh start with some or all creditors—be it out of court, be it as part of a reorganization procedure—he will have to pay up eventually. If there is not enough money to satisfy the debt in an enforcement or in a bankruptcy proceeding, the creditor can start new collection proceedings for up to twenty years thereafter (articles 149–149a and 265 of the Federal Code on the Enforcement of Money Judgments and Bankruptcy, SchKG). Nevertheless, after a bankruptcy proceeding, the creditor will first have to prove that the debtor has acquired new assets that go beyond the minimum needed for a basic standard of living (article 265a SchKG).
- 2.
The enforcement proceedings of the SchKG apply not only to money judgments and monetary debts between private persons, but also to money judgments and monetary debts arising from administrative proceedings, taxes, and criminal fines. In contrast, the enforcement of non-money judgments and decrees is governed by articles 335 et seq. of the Swiss Civil Procedure Code.
- 3.
The personal jurisdiction of the enforcement office is determined by articles 46–55 SchKG. Generally, proceedings are to be conducted at the domicile of the debtor, though there are a number of exceptions, particularly if the debtor is a foreign person or entity.
- 4.
The purpose of this is to enable the debtor to decide whether to object to the claim. See, e.g., Ammon and Walther (2013), Section 17 note 17.
- 5.
See the official form provided by the Swiss government: <https://www.bj.admin.ch/content/dam/data/bj/wirtschaft/schkg/musterformulare/form/03-d.pdf>.
- 6.
Pursuant to article 80 para. 2 SchKG the following are equivalent to a court judgment (including a criminal judgment imposing a fine): in-court settlements or recognitions of debt; enforceable official records pursuant to article 347 et seq. of the Swiss Civil Procedure Code; orders of Swiss administrative authorities and judgments of Swiss administrative courts.
- 7.
According to article 25–27 of the Swiss Act on Private International Law, a foreign judgment can be recognized and enforced in Switzerland if it is final, the foreign court had personal jurisdiction over the defendant, the defendant was properly served with process, the foreign proceedings did not violate essential tenets of Swiss procedural fairness, and the foreign judgment is not manifestly incompatible with Swiss public policy. For more detail see Baumgartner (2008), pp. 219–227.
- 8.
Sections 688 et seq. German Code of Civil Procedure.
- 9.
Sections 244 et seq. Austrian Code of Civil Procedure.
- 10.
Regulation (EC) No. 1896/2006 of the European Parliament and of the Council of December 12, 2006, creating a European order for payment procedure, OJ L-399, 1 (2006).
- 11.
See Baumgartner (2019), pp. 30–31.
- 12.
To make sure the debtor is informed of his right to object to the claim, the payment order must be personally served on the debtor by the enforcement officer, a mail carrier, or, if the debtor attempts to evade delivery, by a police officer. Simply putting the payment order into the debtor’s mailbox or delivery by registered mail will not do (article 72 SchKG; BGE 117 III 7).
- 13.
- 14.
On the enforcement proceedings, see Sect. 2. For the statistics see Sect. 4. Another possibility is that the creditor abandoned the proceedings after service of an unobjectet-to order of payment. But given the low fee for an application to begin enforcement and the efficiency of the proceeding, this is an unlikely scenario.
- 15.
There are exceptions to this rule. Pursuant to article 43 SchKG, enforcement by bankruptcy is excluded and, instead, enforcement by seizure applies with certain kinds of debts, including taxes, customs duties, criminal fines as well as recurrent family law maintenance and assistance obligations. On the other hand, individuals not listed in the register of commerce can be subject to bankruptcy proceedings, for instance, by declaring themselves insolvent (article 191 SchKG) or in the cases of article 190 SchKG. On the latter see infra fn. 29.
- 16.
Baumgartner and Heisch (2019), pp. 581–582.
- 17.
Article 92 SchKG lists several assets that are exempt from seizure, such as objects for the personal use of the debtor and his family (i.e. clothes, personal effects, household appliances, furniture or other things) insofar as they are indispensable, objects necessary for the exercise of his profession, and certain social security and pension entitlements.
- 18.
In the 1997 reform of the SchKG, the wording of its article 95 para. 1 was changed so as to make clear that the garnishment of wages is one of the first options for the enforcement officer to consider rather than being something that is only permissible if no other assets can be found, as had been the practice before. See, e.g., Foëx (2010), article 95, note 3.
- 19.
See also supra note 1.
- 20.
Pursuant to article 1 SchKG, the cantons are required to form one or more enforcement districts. Each debt enforcement district has a debt enforcement office under the direction of an enforcement official (article 2 SchKG).
- 21.
See, e.g., Massachusetts Rule of Civil Procedure 4.2(c) (requiring court approval for an attachment); Section 829 of the German Code of Civil Procedure (requiring a court order for the garnishment of debts). But see Section 845 of the same Code (allowing for an attachment by the Gerichtsvollzieher to secure a later seizure by the court).
- 22.
- 23.
In a few cantons, an administrative authority is responsible for supervision. But article 75 para. 2 of the Bundesgerichtsgesetz (BGG; Act on the Federal Supreme Court) requires the cantons to provide a state high court ultimately to decide these matters, since they can be appealed to the federal Supreme Court.
- 24.
Gebührenverordnung zum Bundesgesetz über Schuldbetreibung und Konkurs (in short: GebVSchKG).
- 25.
For the complete table of costs see article 16 para. 1 GebVSchKG.
- 26.
For the complete table of costs see article 20 para. 1 GebVSchKG.
- 27.
BGE 129 III 239 E. 3.2.1; but see BGE 107 III 73 E. 3 (does not apply to cash amounts owned years ago, as they would be difficult to prove). The purpose of the obligation to reveal assets formerly owned by the debtor is to permit the creditor to sue against the third-party owner for retroactive seizure of the property in appropriate cases (Pauliana or Anfechtungsklage, articles 285 et seq. SchKG, which is akin to the avoidance powers in bankruptcy law).
- 28.
Baumgartner and Heisch (2019), p. 585.
- 29.
Pursuant to article 190 para. 1 no. 1 SchKG, a creditor may request the court to open bankruptcy proceedings without first conducting preliminary proceedings against any debtor (1) whose whereabouts are unknown, (2) who has fled in order to avoid fulfilling his obligations, or (3) who has acted fraudulently or concealed assets in seizure proceedings.
- 30.
BGE 51 III 37, 39 et seq., a decision the Swiss Supreme Court has since regularly confirmed.
- 31.
Baumgartner and Heisch (2019), p. 587.
- 32.
KGer SG, GVP-SG 2009 Nr. 88 p. 211 et. seq.; KGer BL, 420 16 455, E. 2.3; Winkler (2017), art. 91, note 36.
- 33.
- 34.
For an example, see BGer 5A_800/2010.
- 35.
BGE 124 III 170 E. 5a. This decision of the Federal Supreme Court has, however, been subject to some criticism. See Fey (1998), pp. 1247 et seq.
- 36.
The sanctions are the same as those discussed supra, II. 2.
- 37.
See supra, II. 2.
- 38.
See article 35 SchKG. Where circumstances so require, publication may be effected by other means.
- 39.
- 40.
See supra III. b.
- 41.
- 42.
The number of bankruptcy proceedings closed is larger than the number of proceedings completed since a considerable number of bankruptcy proceedings are closed soon after opening because of a lack of debtor assets to cover the costs of such proceedings, let alone to satisfy any non-secured the creditors.
- 43.
Statistics available at: <https://www.betreibungsinspektorat-zh.ch/deu/documents/Statistik.2019ListeABetreibungsamter.pdf>.
- 44.
Recall that actual enforcement of the debt proceeds either by seizure or by bankruptcy. See supra II. 2. If the debtor is subject to enforcement through bankruptcy, the creditor can ask the bankruptcy office, after successfully concluding the preliminary proceedings, to send the debtor a bankruptcy announcement, informing him that, after twenty days, the creditor can obtain a court order to open bankruptcy proceedings (article 160 SchKG). The purpose of the announcement is to give the debtor one last chance to pay the debt and thus to avert bankruptcy.
- 45.
In about 9% of cases with a payment order, the debtor objected. In a bit more than 1% of cases with a payment order (or in about 13% of the cases in which the debtor objected to the payment order), the courts of the Canton of Zurich granted a provisional or a final reopening of the enforcement proceedings. See the statistics of the Supreme Court of the Canton of Zurich (https://www.gerichte-zh.ch/fileadmin/user_upload/Dokumente/obergericht/Rechenschaftsberichte/Rechenschaftsbericht_2018.pdf), p. 122, according to which there were 4′828 and 4′950 provisional and definitive reopenings of enforcement proceedings handed down by Zurich courts in 2017 and 2018, respectively. That leaves about 8% of cases, in which the creditor did not or could not obtain a judicial reopening of the enforcement proceedings after the debtor had objected to the payment order.
- 46.
See supra note 45 and accompanying text. There is also the very real possibility of the creditor initiating preliminary proceedings for harassment purposes only, knowing that the debt does not exist. The debtor can easily stop such shenanigans by objecting to the claim.
- 47.
See the statistics of the Supreme Court of the Canton of Zurich (https://www.gerichte-zh.ch/fileadmin/user_upload/Dokumente/obergericht/Rechenschaftsberichte/Rechenschaftsbericht_2018.pdf), pp. 93–94.
- 48.
See supra note 47 and accompanying text.
- 49.
On one-shot players as opposed to repeat players see Galanter (1974).
- 50.
See Baumgartner (2019), pp. 37–40.
- 51.
Baumgartner and Heisch (2019), pp. 590–591.
- 52.
Baumgartner and Heisch (2019), p. 591.
- 53.
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Baumgartner, S.P., Heisch, M. (2022). Finding Defendant’s Assets in Proceedings to Enforce Money Judgments in Switzerland. In: Deguchi, M. (eds) Effective Enforcement of Creditors’ Rights. Ius Gentium: Comparative Perspectives on Law and Justice, vol 91. Springer, Singapore. https://doi.org/10.1007/978-981-16-5609-5_17
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