Stronger Protection Against Illegitimate Debt Collection Procedures
Basically, in Switzerland everyone can launch a debt collection procedure against another person, without such a procedure needing to be checked for its legitimacy. Whether it is legitimate or not, however, an entry in the debt collection register may cause some disadvantages for the affected person. A revision of the Debt Collection and Bankruptcy Act is now supposed to ensure better protection against illegitimate debt collection procedures.
Current Legal Situation and Problems
Basically, in Switzerland everyone can launch a debt collection procedure against another person (cf. series of articles on debt collection). The reason behind it is not verified, nor does any documentation have to be provided to prove the claims, as it is enough to name only their cause.
If an illegitimate debt collection procedure is opened against you, you can stop it by raising an objection. But even if you do it and the alleged creditor does not seek the removal of the objection, the relevant entry in the debt collection register remains visible to third parties for five years. This may sometimes create huge disadvantages, e.g. when you look for an apartment or want to take out a bank loan.
So far an entry in the debt collection register was no longer shown to third parties once you could persuade the alleged creditor to withdraw its debt collection request (article 8a clause 3 letter c of the Debt Collection and Bankruptcy Act) or successfully defend by filing a negative declaratory action.
Amendments
Now it has been decided to amend the crucial Debt Collection and Bankruptcy Act. More specifically, articles 8a, 73 and 85a thereof are going to be revised.
In article 8a clause 3 of the Debt Collection and Bankruptcy Act, new letter d will be added, which reads that, within three months after the debtor receives a default summons, he or she can apply for suppression of any disclosures about the debt collection procedure. The request is granted if the creditor fails, within twenty days, to prove that the creditor has successfully sought the removal of the objection. Such evidence can also be provided at a later date. Furthermore, the debt collection procedure will be revealed to third parties if it is sustained.
Article 73 of the Debt Collection and Bankruptcy Act will be revised so that the alleged debtor is no longer bound by a period within which the creditor can be requested to prove its claim and make an overview of its claims available for inspection. At present, it is only possible as part of the obligation to contest.
The amendment of article 85a clause 1 of the Debt Collection and Bankruptcy Act will enable the debtor, in addition to filing an objection, to have the territorially competent court find that the debt does not or no longer exists or has been deferred. The deadline for an optional referendum expired on 7 April 2017 without any action being taken. Now it is up to the Federal Council to decide when the new changes will come into force.
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