Execution of credits

What to do when getting prosecuted in Switzerland?

Everyone of us forgets to pay bills on time once in a while. It can happen, but it shouldn`t, - especially not in Switzerland.

At a default of payment you normally first receive one or two dunning letters. However, in an extreme case a late payment can result directly in a prosecution. Since such a prosecution can be very painful, the following article will show you the consequences if getting prosecuted and advice you how to deal with a registration in a prosecution index.

Basically in Switzerland everbody, each individual and incorporation can get prosecuted. The meaning of this sentence is more remarkable than it seems, since the word "everybody" means that not just a debitor can be target of a prosecution. Actually it`s possible to get prosecuted even without any existing debt, yes, even without any legal or factual relationship to the person which starts the prosecution.

Why so ?

The federal swiss act of prosecution (Schuldbetreibungs- und Konkursrecht) doesn`t require a proof of an existing debt when launching a prosecution. Since the demand of prosecution isn`t a action which is first discussed by a court, it`s very simple to start one. By the time starting it, you don`t have to prove the debt, what means that in Switzerland anybody could launch a prosecution against anybody. The only thing the – potential – debitor has to do is to fill out a prosecution application form and to pay a bailment. We will later in this expertise see that the easy it is for the debitor to launch the prosecution, the harder it is for the prosecuted person to get its name out of the prosecution index. Especially for a person which faces an absolute unjustified prosecution this – weird – system can have grave consequences.

If a prosecution was launched against you once – justified or not – your name will be registered at the local prosecution register for at least the next three, eventually five years. After this time your name will be erased from the list. You might ask yourself now what the consequences can be if getting listed on this index. Well, everyone who ever tried to lease a car, take up a loan or rent an appartement in Switzerland knows that the first document they ask for is the abridgement of the prosecution index (Betreibungsregisterauszug). If you don`t have a "white sheet" then, the chance of getting a negative answer on your request is close to a 100 %.

Switzerland knows three types of prosecution:

The prosecution on execution, the prosecution on execution of the pledge and the prosecution on insolvency.

If an individual is not registered in the trade register, it normally faces the prosecution on execution. This type of prosecution starts when the debitor fills out the application form at the local prosecution office. From that day forth the state takes over the prosecution process. You as a debtor will now receive the so called payment summons (Zahlungsbefehl) from the local prosecution officer. Normally the swiss mail takes over this job. When receiving the payment summons you have ten days of time to either pay the debt or to object. Your behaviour within this ten days is of enormous importance for the future proceeding. If you simply pay the debt you might get rid of the prosecution officers, but for the next three years you will still be registered in the prosecution index.

If you object – what you can already do when the postman hands out the payment summon to you – the whole prosecution will be stopped for a certain while and you will win time to react.

An objection causes now a burden of proof to the debitor which now for the first time has to show that his prosecution is justified. If he now can`t proof your debt, the prosecution will either be discontinued after one year or, if the evidences aren`t sufficient, he has to choose the long-lasting way of a civil process. Depending on the complexity of the case, a trial could last for years.

However, even the discontinuation takes place you will still remain registered.

Generally our advice is the following:

After receiving the payment summon you immediately object, - if the prosecution is justified. The objection will give you time to react. Get in contact with the debitor and propose the following proceeding: In case he abandons the prosecution at the prosecution office, you agree to make an additional extra payment. Most debitors agree thus they get more than they deserve. Swisscom for instance, the largest provider of telecom services in Switzerland, demands a hundred francs for a discontinuation notice to the prosecution office. By doing so you have to make sure that the note will contain the sentence "Discontinuation by the debitor" ("Rückzug durch den Gläubiger"), otherwise you still will appear registered.

Now why is it so important not to be registered in the prosecution index ? As mentioned, in Switzerland, if you for instance want to rent an appartement, they ask for an abridgement of the prosecution index. If there appears a note that you`ve been facing a prosecution in the last three years your chances to get the appartement are close to zero.

However, there are two very negative points in the swiss prosecution system:

First of all, on the one hand even a completely unjustified prosecution can be launched and on the other hand you even then are going to be registered in the index. It does not need a lot of fantasy to see that such a system invites some people to blackmail others by impend them with a prosecution. The other negative point is that even if you pay your name wan`t be deleted. Facing a prosecution in Switzerland isn`t a nice thing and can have grave impacts on your ability to place certain contracs. However, if you`re facing a unjustified prosecution a consultation at a lawyers office will be recommended.