Personal Bankruptcy in Switzerland: A Practical Guide

Declaring personal bankruptcy in Switzerland heavily impacts your financial life, but there are cases in which declaring personal bankruptcy can be beneficial.

What are the consequences of declaring personal bankruptcy in Switzerland?

When you declare bankruptcy, your monetary assets are seized and any material assets of value are seized and sold. The seized assets are divided between your creditors. Not all assets can be seized. You can find detailed information in the guide to seizable and unseizable assets.

Your personal bankruptcy is recorded in your credit histories at Swiss credit bureaus and debt collection offices.

After declaring bankruptcy, you normally will not be able to obtain personal loans or even credit cards. You also are not likely to be approved for mortgages. You may also receive poor credit scores, making it difficult to purchase goods and services on credit. It may also be very difficult to rent a new home.

What are the advantages of declaring personal bankruptcy in Switzerland?

When you declare personal bankruptcy, all debt claims filed against you in debt collection registers are put on hold. This stops the accumulation of interest charges on unpaid debts. Salary attachments are also put on hold. This gives you a reprieve, as money is no longer automatically deducted from your salary to repay your debts.

Your debts are not forgiven, but your contractual debt-repayment schedule no longer applies and your creditors cannot file new debt collection claims for your existing debts. This gives you a chance to rebuild your financial life and make a plan to repay your debts.

What are the requirements for declaring personal bankruptcy in Switzerland?

In order to declare bankruptcy, you have to be able to provide clear evidence that you are over-indebted – meaning your income is insufficient to meet your debt repayments as per your contracts. You must also provide clear evidence that you have made unsuccessful attempts to negotiate with your creditors outside of court.

Additionally, you will generally be required to prove that you have a stable income and overall situation. Your income must be significantly higher than the poverty line applicable in your place of residence. You must also be able to pay your taxes without difficulty.

What is the process for declaring personal bankruptcy in Switzerland?

You must submit a request to declare yourself bankrupt. The form can be obtained from your local bankruptcy office. In some cantons (Zurich, for example), the functions of bankruptcy offices are carried out by notary offices.

You must submit a detailed list of all debt claims against you along with the application. Along with this application you must submit account details for all of your bank accounts. If your salary is attached, you must also provide proof of minimum subsistence level (as determined by the debt collection office) along with an unabridged debt collection register statement. If no attachments have been placed on your income, you must provide salary slips.

If the judge accepts your bankruptcy claim, you will be declared bankrupt. Your creditors are issued certificates of loss which clearly state how much you owe them. These certificates entitle them to request reviews of your financial situation and – if you build up significant assets – claim repayment of debts. You are issued a certificate of bankruptcy which you can use to repeal new debt collection claims filed on debt incurred before your bankruptcy.

Do bankruptcy claims expire?

Certificates of loss expire after 20 years. However, creditors can file new debt collection claims against you based on the certificates of loss to have the certificate renewed for another 20-year term.

The term cam also be renewed if you acknowledge any debt collection claims or make any repayments. For that reason, it is important to avoid recognizing debt claims sent to your by creditors or debt collectors.

How much does it cost to file for personal bankruptcy in Switzerland?

Before bankruptcy proceedings can begin, you will have to front the costs of the court case. Costs vary between municipalities and are typically based on the number of creditors you have, but you should expect to pay up to 6000 Swiss francs up front. Some courts do not require you to pay the full costs up front.

Who can I contact for advice about personal bankruptcy?

Declaring bankruptcy has long-term implications and is best avoided if there are other possible options for repaying your debts. Your canton’s debt consultation office can help you explore all options for repaying your debts, and also provide you with detailed information about personal bankruptcy for your specific situation.

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