Restrictions on access to debt enforcement register
The Swiss Debt Enforcement and Bankruptcy Act (DEBA) allows the initiation of debt enforcement proceedings before a court becomes involved. A creditor can request the competent debt enforcement office (normally at the domicile of the debtor) to issue a payment order to the debtor. The office serves that payment order without verifying the existence and enforceability of the purported claim; however, the debtor may declare its objection, within 10 days, to the debt enforcement office. If the debtor objects to the payment order, the creditor will first have to obtain a favourable court decree before continuing with the enforcement proceedings. If, on the other hand, the debtor does not object to the payment order, the creditor may directly continue with enforcement proceedings, which will ultimately lead to the seizure of assets in the case of individuals or bankruptcy where legal entities are involved (generally speaking).
Given the debt enforcement office does not assess the purported claims before issuing a payment order, the order is served even where no claim exists or exists only in a lower amount.
Each debt enforcement office keeps a debt enforcement register for its district (Register). The Register lists all payment orders served to debtors located in the district, objections raised by debtors, and further enforcement steps taken. Anyone who establishes a legitimate interest in obtaining information on a specific person has the right to receive the Register records on that person for the previous five years.
The intended execution of a contract creates a sufficient interest to receive information on the prospective counterparty. The Register is thus an important source of creditworthiness assessments. In practice, before entering into binding agreements it is customary for landlords, employers, banks, and so on, to request a Register excerpt from a prospective counterparty. An unjustified payment order - which shows in the Register - can thus have a substantial adverse impact on the ability of an individual or entity to do business.
In order to mitigate the negative effects of unjustified payment orders, the DEBA will be amended, effective January 1 2019, such that three months after receipt of a payment order, an objecting debtor may request the debt enforcement office not to disclose the payment order. The office then sets a 20-day deadline to the creditor to prove that it has...