It is the moment every person dreads, when a company, individual or an institution borrows too much money and cannot pay it back they can easily go bankrupt. Their possessions are usually taken by creditors. In this blog, we take a closer look at debt recovery procedures and how to get support when you have outstanding debts.
If you ask family members or friends to help pay your debts, it is advisable to draw up an acknowledgement of debt agreement. This agreement sets out the way in which the debt is to be paid. It includes important details like the amount of money due, the deadline for it to be paid, and the interest rate.
If you are in debt and you receive a payment summons you have 20 days to pay the amount due. A payment summons is usually the final demand to pay the amount to the creditor. Legally you must pay the amount directly to the debt enforcement office from which you received the summons. It is advisable to ask for the debt enforcement proceeding to be stopped by writing an official letter.
Moreover, you can also pay the debt in increments to the enforcement office within 12 months, when you have paid off your debt fully you must immediately ask for the creditor to stop the debt enforcement procedures.
Challenging a Payment Summons
In certain instances you may not agree with the amount of money required of you, under such circumstances you can file an official objection orally or in writing at the debt enforcement office. You have 10 days to file this objection from the day you receive the payment summons.
When you file an objection the debt enforcement proceedings are put on hold. Depending on the amount of money due your case might be relegated to either the justice of peace or the district court. For amounts of money up to CHF 5000 the acting authority is the office of the justice of peace, amounts greater than this are handled by the district court itself. The relative authority then decides whether the objection should be set aside, if the objection is set aside the creditor has one year from the time the summons is issued to request the proceeding to continue; until the objection is set aside all assets are frozen.
Depending on your case and if you fail to pay the amount of money due within the required deadline from the time you received the summons, the bankruptcy office may seize your assets and salary to pay off the debt. Assets that could be seized include salary income for self employed individuals, unemployment benefits, pension and lump sum payments, real estate and other movable assets with a higher value than the assumed liquidation costs.
Steps to Follow
If you have debts that you are unable to repay you can apply to any bankruptcy office in the canton you live in. You can also ask for guidance from any of the debt advice organizations. The main goal for filing a bankruptcy procedure is to collect a list of all creditors and to repay the debt owed. One of the benefits of a bankruptcy procedure is that all open payment summons against the debtor are frozen. No new payment summons can be issued for debts incurred prior to the beginning of the bankruptcy proceedings.
If you still have remaining unpaid debt at the end of your bankruptcy proceedings, the bankruptcy office issues a certificate of loss for any remaining debts. The certificate of loss allows the creditor to collect the debts within a period of 20 years; furthermore it also shows that the debtor acknowledges the amount of debt.
FERZ SA understands the need to eliminate outstanding debt. Our experienced team will give you legal advice to resolve debt issues and ensure that your debt doesn’t jeopardize the overall productivity of your business.