¹ Each debt enforcement district has a debt enforcement office, which shall be headed by a debt enforcement officer.

² Each bankruptcy district has a bankruptcy office, which shall be headed by a bankruptcy officer.

³ Each debt enforcement officer and each bankruptcy officer shall have a deputy who shall replace him if he recuses himself or is unable to manage the office.

⁴ The debt enforcement office and the bankruptcy office may be merged and headed by the same public official.

⁵ The cantons shall otherwise decide on how the debt enforcement and the bankruptcy offices are organised.

The remuneration of debt enforcement and bankruptcy officers and their deputies is a matter for the cantons.

¹ The canton shall be liable for any loss or damage caused unlawfully by debt enforcement and bankruptcy officers and their employees, their auxiliaries, non-official bankruptcy administrations, commissioners, liquidators, supervisory and judicial authorities and the police in the fulfilment of the duties assigned to them by this Act.

² The person suffering loss or damage has no claim against the person at fault.

³ Recourse by the canton against the person who has caused the loss or damage is governed by cantonal law.

⁴ Where the severity of the loss or damage justifies it, there is also a right to satisfaction.

¹ A claim for damages shall become time-barred three years from the day on which the person suffering damage became aware of the damage, but in any case ten years from the day on which the harmful behaviour occurred or ceased.

² If the person who caused the damage has committed a criminal offence through his conduct, the claim for damages shall become time-barred at the earliest when the right to prosecute becomes time-barred. If this no longer applies as a result of a first-instance criminal judgment, the claim shall become time-barred at the earliest three years after notice of the judgment was served.

Where an action for damages is filed on the grounds of unlawful conduct by the cantonal supervisory authorities of second instance or of the cantonal composition court of second instance, the Federal Supreme Court has exclusive jurisdiction.

¹ The debt enforcement and bankruptcy offices shall keep a record of their official activities and of the requests and declarations they receive; they keep the registers.

² The records and registers are conclusive in their content until proven otherwise.

³ The debt enforcement office shall correct an incorrect entry ex officio or at the request of the person concerned.

¹ Any person who can credibly demonstrate an interest may inspect the records and registers of the debt enforcement and bankruptcy offices and obtain extracts from them.

² An interest is deemed to be credible in particular if the request for information is made in direct connection with the conclusion or performance of a contract.

³ The offices shall not provide third parties with information about debt enforcement proceedings if:

a.

the debt enforcement proceedings are null and void or have been annulled as the result of an appeal or a court decision¹⁴;

b.

the debtor succeeded with an action for restitution of money paid without legal cause;

c.

the creditor has withdrawn the debt enforcement proceedings;

d.¹⁵

the debtor has filed an objection and has within three months of the summons for payment being served and before the third-party right to inspect has expired submitted a request that information should not be provided, unless the creditor proves within a period of 20 days set by the debt enforcement office that proceedings to set aside the objection (Arts 79-84) were initiated in good time; if this proof is subsequently provided or if the debt enforcement continues, the proceedings may be brought to the attention of third parties again, unless the debtor proves that a binding decision has been taken to reject a request from the creditor to have the objection set aside.

⁴ The right to inspect of third parties expires five years after the conclusion of the proceedings. Judicial and administrative authorities may still request extracts in the interests of proceedings pending before them.

¹ The Federal Council shall exercise oversight over the debt enforcement and bankruptcy matters and ensure the uniform application of this Act.

² It shall issue the ordinances and regulations necessary for the implementation of this Act.

³ It may issue directives to the cantonal supervisory authorities and request annual reports from them.

⁴ …²⁶

⁵ It shall coordinate electronic communication between the debt enforcement and bankruptcy offices, the land register and commercial register offices, the courts and the public.²⁷

¹ With the exception of cases in which this Act requires court action, an appeal may be filed with the supervisory authority against any order of a debt enforcement or bankruptcy office due to infringement of the law or unreasonableness.²⁸

² The appeal must be filed within ten days of the date on which the appellant received notice of the order.

³ An appeal may be filed at any time on the grounds of denial of justice or unjustified delay.

⁴ The office may reconsider its order at any time before the deadline on which it must submit its response to the appeal. If it issues a new order, it shall give notice of the same to the parties immediately and inform the supervisory authority.²⁹

¹ The decision of a lower supervisory authority may be referred within ten days of notice thereof being given to the higher cantonal supervisory authority.

² An appeal may be filed at any time with the higher cantonal supervisory on the grounds of denial of justice or unjustified delay by a lower supervisory authority.

An appeal to the Federal Supreme Court is governed by the Federal Supreme Court Act of 17 June 2005³².

In cases relating to debt enforcement proceedings based on a bill of exchange, the period allowed for filing an appeal in first and second instance amounts to five days only; the authority must decide on the appeal within five days.

¹ …³⁵

² The following provisions apply to the procedure before the cantonal supervisory authorities:³⁶

1.

The supervisory authorities must in every case in which they act in this capacity designate themselves as such and, if appropriate, as the higher or lower supervisory authority.

2.

The supervisory authority establishes the facts of the case ex officio. It may require the assistance of the parties in this process and need not consider their request if they refuse to provide assistance that is requested and can reasonably be expected of them.

3.³⁷

The supervisory authority evaluates the evidence freely; subject to Article 22, it may not go beyond the parties' requests.

4.

The decision shall be justified, contain instructions on rights of appeal, and written notice thereof shall be given to the parties, the office concerned and any other persons concerned.

5.³⁸

The proceedings are free of charge. In the case of malicious or vexatious litigation, the party concerned or their agent may be required to pay a fine not exceeding 1500 francs and the fees and outlays.

³ The cantons shall otherwise regulate the procedure.

An authority that upholds an appeal shall order the contested act to be quashed or corrected; it shall order the execution of acts that the official refuses to carry out or delays without justification.

The cantons shall designate the judicial authorities that are responsible for making the decision assigned to a court under this Act.

The cantons shall designate the institutions that are required to accept deposits in the cases provided for in this Act (official depositaries). The cantons are liable for the deposits held by these institutions.

¹ The cantons may, unless federal law applies, impose consequences under public law (such as declaring a person unfit for public office or to carry on a profession or activities requiring authorisation) to unsuccessful distraint proceedings or a declaration of bankruptcy. These consequences may not include a withdrawal of the right to vote or be elected, or the publication of unpaid debt certificates.

² The legal consequences must be revoked if the bankruptcy is annulled, if all creditors holding unpaid debt certificates have been repaid in full or their claims have become time-barred.

³ If the only creditor to sustain a loss is the debtor's spouse or registered partner, no consequences under public law may be imposed for unsuccessful distraint proceedings or bankruptcy.⁴³

¹ Any person with legal capacity to act is authorised to represent other persons in enforcement proceedings. This also applies to professional representation. The cantons may prohibit a person from acting as a professional representative for good cause.

² The costs of representation in proceedings before the debt enforcement and bankruptcy offices may not be charged to the other party.

The computation of and compliance with deadlines are governed by the provisions of the Civil Procedure Code of 19 December 2008⁵¹ (CPC), unless this Act provides otherwise.

¹ …⁵³

² A deadline is also complied with if a debt enforcement or bankruptcy office without jurisdiction is seised before its expiry; this office shall transfer the case immediately to the office that has jurisdiction.⁵⁴

³ …⁵⁵

⁴ In the case of written submissions that contain errors that can be corrected, an opportunity must be given to correct them.

¹ The deadlines laid down in this Act may not be amended by agreement.

² If a party to proceedings lives abroad or if he must be notified by public notice, a longer deadline may be granted or an existing deadline extended.⁵⁶

³ A party to proceedings may waive his right to claim non-compliance with a deadline if the deadline is imposed exclusively in his interest.⁵⁷

⁴ Any person who is prevented from acting within a deadline due to circumstances beyond his control may request the supervisory authority or the judicial authority with jurisdiction over the case to reinstate the deadline. From the date on which those circumstances no longer apply, he must carry out the required legal act for the competent authority within the same period as that which has expired and file an application stating the grounds for reinstating the deadline.⁵⁸

¹ Notices, orders and decisions of the debt enforcement and bankruptcy offices and the supervisory authorities shall be served by registered mail or in any other way against confirmation of receipt, unless this Act provides otherwise

² With the consent of the person concerned, notices, orders and decisions may be sent electronically. They must bear an electronic signature in accordance with the Federal Act of 18 March 2016⁶² on Electronic Signatures. The Federal Council shall regulate:

a.

the signature to be used;

b.

the format of notices, orders and decisions and their enclosures;

c.

the method of transmission;

d.

the date on which the notice, order or decision is deemed to have been served.⁶³

¹ Public notice shall be given in the Swiss Official Gazette of Commerce and in the relevant official cantonal gazette. For the calculation of deadlines and determining the legal consequences of the notice, publication in the Swiss Official Gazette of Commerce is decisive.⁶⁴

² If the circumstances so require, notice may also be given in other publications or by public proclamation.

¹ Debt enforcement proceedings are continued by way of bankruptcy proceedings, either in the form of "ordinary bankruptcy proceedings" (Arts 159-176) or of "debt enforcement proceedings based on a bill of exchange" (Arts 177-189) if the debtor is registered in the Commercial Register as any of the following:

1.

as the owner of a sole proprietorship (Arts 934 and 935 CO⁶⁷);

2.

as a member of a general partnership (Art. 554 CO);

3.

as a member of a limited partnership with unlimited liability (Art. 596 CO);

4.

as a director of a partnership limited by shares (Art. 765 CO);

5. ⁶⁸

...

6.

as a general partnership (Art. 552 CO);

7.

as a limited partnership (Art. 594 CO);

8.

as a company limited by shares or a partnership limited by shares (Arts 620 and 764 CO);

9.

as a limited liability company (Art. 772 CO);

10.

as a cooperative (Art. 828 CO);

11.

as an association (Art. 60 Swiss Civil Code (CC)⁶⁹);

12.

as a foundation (Art. 80 CC);

13.⁷⁰

as an investment company with variable capital (Art. 36 Collective Investments Act of 23 June 2006⁷¹ (CISA));

14.⁷²

as a limited partnership for collective investment (Art. 98 CISA).⁷³

² …⁷⁴

³ Registration takes effect on the day after notice thereof in published in the Swiss Official Gazette of Commerce.

¹ Persons who were registered in the Commercial Register remain subject to bankruptcy proceedings for six months following publication of their deletion in the Swiss Official Gazette of Commerce.

² If the creditor requests continuation before the expiry of this deadline or if he demands that a summons for payment be issued in debt enforcement proceedings based on a bill of exchange, the debt enforcement proceedings shall be continued by way of bankruptcy proceedings.⁷⁵

The realisation of items that have been seized under criminal or fiscal provisions or under the Federal Act of 18 December 2015⁸⁴ on the Freezing and the Restitution of Illicit Assets held by Foreign Politically Exposed Persons shall be carried out in accordance with the relevant federal or cantonal provisions.

The pursuit of pawnbrokers' claims is governed by Article 910 of the Civil Code (Swiss Civil Code)⁸⁶.

Debt enforcement against debtors of no fixed abode takes place where they are currently to be found.

Provided the estate has not been distributed, a contractual community of property formed or bankruptcy liquidation ordered, debt enforcement against a deceased person's estate may be carried out at the place and by the procedure which would have applied to the deceased person at the time of his death.

¹ In the case of debtors domiciled abroad who have a business establishment in Switzerland, enforcement take place in respect of liabilities incurred for the account of the business establishment at the location of the business establishment.

² Where debtors domiciled abroad have elected for a domicile in Switzerland in order to fulfil an obligation, enforcement may take place in respect of this obligation at the place of special domicile.

¹ Where a pledge of chattels has been made to secure the claim, debt enforcement proceedings may either take place where required in accordance with Articles 46-50, or at the place where the pledge or the most valuable part thereof is located.⁹¹

² For claims secured by a mortgage⁹², the debt enforcement proceedings may only take place⁹³ where the mortgaged immovable property is located. If the debt enforcement proceedings related to two or more immovable properties located in different debt enforcement districts, debt enforcement must take place in the district in which the most valuable part of the immovable properties is located.

If an attachment is made in respect of a claim, debt enforcement proceedings may also be instituted where the attached asset is located.⁹⁴ The notice of impending bankruptcy and the declaration of bankruptcy may however only be issued where debt enforcement proceedings must normally take place.

In the event of the death of the debtor's spouse or registered partner, or of a relative or in-law of the debtor in direct line, or of a member of the debtor's household, the debtor shall be entitled to a two-week stay of enforcement from the date of death.

¹ In debt enforcement proceedings for debts due from a deceased person's estate, a stay of enforcement applies from the testator's date of death for the two subsequent weeks and during the period of reflection allowed for accepting or disclaiming the inheritance.¹²⁰

² Debt enforcement proceedings raised during the lifetime of the testator may be continued against the estate in accordance with Article 49.¹²¹

³ Proceedings may only be continued against the heirs if they involve debt enforcement proceedings to realise a pledge or if the deadlines given in Articles 110 and 111 for participating in distraint proceedings in a case of debt enforcement by distraint proceedings have already expired.

If an arrested person who has no representative becomes subject to debt enforcement proceedings, the debt enforcement officer shall set him a deadline for appointing one.¹²² During this period, the arrested person is entitled to a stay of enforcement.

The debt enforcement officer may grant a seriously ill debtor a stay of enforcement for a specific period of time.

In the event of an epidemic or a national disaster, as well as in times of war, the Federal Council or, with its consent, the cantonal government may decide to stay enforcement in a specific area or for certain sections of the population.

¹ On receipt of the request for debt enforcement, the debt enforcement office shall issue a summons for payment.

² The summons for payment contains:

1.

details of the request for debt enforcement;

2.

the request to satisfy the creditor for the claim together with the debt enforcement costs within 20 days or, if the debt enforcement proceedings are based on the provision of security, to provide security within this deadline;

3.

notification that if the debtor wishes to contest the claim or a part thereof or the right to assert it by way of debt enforcement, he must declare this to the debt enforcement office within ten days of service of the summons for payment (objection to the summons);

4.

the warning that if the debtor neither complies with the summons for payment nor files an objection to the summons, the debt enforcement proceedings will continue.

¹ The summons for payment is issued in duplicate. One copy is intended for the debtor, the other for the creditor. If the two documents are not identical, the copy delivered to the debtor shall take precedence.

² If joint debtors are sued at the same time, a separate summons for payment shall be served on each of them.¹⁴²

¹ The summons for payment is served on the debtor after receipt of the request for debt enforcement.¹⁴³

² If there are several requests for debt enforcement against the same debtor, all the summons for payment must be served at the same time.

³ In no case may a request received later be executed before an earlier request.

¹ The summons for payment shall be served by the debt enforcement officer, an employee of the office or by post.¹⁴⁴

² On handing over the summons, the person effecting service must certify on both copies the date of service and the details of the person on whom the summons is served.

¹ If the debtor wishes to object to the summons for payment, he must do so immediately verbally or in writing to the person serving the summons or within ten days of service to the debt enforcement office.¹⁴⁶

² If the debtor only partly disputes the claim, he must indicate the disputed amount precisely; if he fails to do this, the entire claim is regarded as disputed.¹⁴⁷

³ If the debtor so requests, he must be issued free of charge with a certificate confirming his objection.

¹ No legal grounds need be given for objecting to the summons for payment. Any person who nevertheless states such grounds is not precluded from stating other grounds at a later date.

² If the debtor disputes that he has acquired new assets (Arts 265, 265a), he must expressly declare this when objecting to the summons, failing which he may not raise this defence at a later date.

³ The provisions on subsequent objection (Art. 77) and on filing an objection to enforcement proceedings based on a bill of exchange (Art. 179 para. 1) are reserved.

¹ Notice of the grounds for filing an objection to the summons for payment shall be given to the creditor on his official copy of the summons for payment; if no objection to the summons has been filed, this must be indicated on the official copy.

² The official copy is sent to the creditor immediately after an objection to the summons is filed, or if no objection is filed, immediately after expiry of the deadline for objecting to the summons.

¹ If the creditor changes during the debt enforcement proceedings, the debtor may subsequently object to the summons for payment at any time prior to the distribution of the proceeds or declaration of bankruptcy.¹⁴⁹

² The debtor must file the objection in writing in the court at the place of debt enforcement within ten days of learning of the change in creditor, providing a statement of the grounds and entering credible defences against the new creditor.¹⁵⁰

³ On receiving notice of the objection to the summons, the court may order the preliminary suspension of the debt enforcement proceedings; it decides on whether to admit the objection after hearing the parties.

⁴ If subsequent objection is accepted, but distraint proceedings have already been carried out, the debt enforcement office shall allow the creditor ten days to request the recognition of his claim. If he does not file a request, the distraint proceedings become invalid.¹⁵¹

⁵ The debt enforcement office shall give the debtor notice of any change in creditor.¹⁵²

¹ The objection to the summons for payment has the effect of suspending the debt enforcement proceedings.

² If the debtor disputes only part of the claim, the debt enforcement proceedings may be continued in respect of the undisputed amount.

If the debtor files an objection to the summons for payment, the creditor must pursue his claim in civil or administrative proceedings. He may only secure the continuation of the debt enforcement proceedings on the basis of an enforceable decision that expressly dismisses the objection.

¹ The court at the place of debt enforcement shall decide on applications to set aside the objection.

² Immediately on receipt of the application, it shall give the debtor the opportunity to respond orally or in writing and shall then give notice of its decision within five days.

If the debtor proves by official documents that the debt together with interest and costs has been settled or deferred, he may at any time request the court at the place of debt enforcement in the former case to dismiss, and in the latter case to suspend the debt enforcement proceedings.

¹ Irrespective of whether an objection to the summons for payment is filed, the debtor may at any time have the court at the place of debt enforcement declare that the debt does not exist or no longer exists or has been deferred. ¹⁷⁴

² On the action being filed, the court shall hear the parties and assess the evidence; if the court considers the action to be very probably well-founded, it shall provisionally suspend debt enforcement proceedings:

1.

in debt enforcement proceedings by distraint or debt enforcement proceedings to realise a pledge prior to realisation or, if this has already taken place, prior to distribution;

2.

in bankruptcy proceedings after service of the notice of impending bankruptcy.

³ If the court upholds the action, it shall cancel or discontinue the debt enforcement proceedings.

⁴ …¹⁷⁵

Where the debtor is subject to debt enforcement by distraint, the debt enforcement office, on receipt of the application for continuation, must immediately distrain the assets or have them distrained by the debt enforcement office at the place where the assets to be distrained are located.

The debtor shall be notified of the distraint proceedings on the preceding day at the latest, with reference being made to Article 91.

¹ The debtor is obliged, subject to criminal penalties for failing to do so:

1.

to attend the distraint proceedings or be represented during the same (Art. 323 para. 1 SCC¹⁸⁵);

2.

to disclose his assets, including those not in his custody, as well as his claims and rights against third parties, to the extent that this is necessary for sufficient distraint (Arts 163 no 1 and 323 no 2 SCC)¹⁸⁶.

² If the debtor fails to attend the distraint without sufficient excuse and does not allow himself to be represented, the debt enforcement office may have him brought to the proceedings by the police.

³ The debtor must open premises and containers to the officer on request. The official may use police powers if necessary.

⁴ Third parties who hold the debtor's assets in safekeeping or with whom the debtor has assets are obliged to provide information to the same extent as the debtor, subject to criminal penalties for failing to do so (Art. 324 para. 5 SCC).

⁵ Authorities are obliged to provide information to the same extent as the debtor.

⁶ The debt enforcement office shall expressly draw the attention of the persons concerned to their obligations and to the penalties for failing to meet the same.

¹ The following are exempt from distraint:

1.¹⁸⁷

items for the personal use of the debtor and his family, such as clothing, personal effects, household appliances, furniture or other movable items, insofar as they are indispensable;

1a.¹⁸⁸

animals kept for domestic purposes and not for property or profit;

2.¹⁸⁹

books of religious edification and items of worship;

3.¹⁹⁰

tools, equipment, instruments and books, insofar as they are necessary for the debtor and his family to practise their profession;

4.¹⁹¹

at the choice of the debtor, either two dairy cows or other cattle, or four goats or sheep, as well as small animals, together with the fodder and straw necessary for their subsistence and bedding for four months, provided the animals are indispensable to the debtor and his family or for the maintenance of his business;

5.¹⁹²

the food and combustible fuels required by the debtor and his family for the two months following the distraint proceedings or the cash or claims required to purchase them;

6.¹⁹³

the clothing, equipment and weapons, the service horse and the pay of a member of the armed forces, the pocket money of a person performing civilian service as well as the clothing and equipment and allowance of a person performing civil protection service;

7.¹⁹⁴

the underlying right to the life annuities created in accordance with Articles 516˗520 CO¹⁹⁵;

8.¹⁹⁶

welfare benefits and support from relief, health and welfare funds, death benefit organisations and similar institutions;

9.¹⁹⁷

pensions, lump-sum settlements and other benefits paid to victims or their relatives for bodily injury, health disorders or the death of a person, insofar as such benefits constitute satisfaction, compensation for medical expenses or for the purchase of aids;

9a.¹⁹⁸

pensions pursuant to Article 20 of the Federal Act of 20 December 1946¹⁹⁹ on Old Age and Survivors' Insurance or pursuant to Article 50 of the Federal Act of 19 June 1959²⁰⁰ on Invalidity Insurance, benefits pursuant to Article 12 of the Federal Act of 19 March 1965²⁰¹ on Benefits Supplementary to the Old Age, Survivors' and Disability Insurance and benefits from family compensation funds;

10.²⁰²

claims to pension and vested benefits against an occupational pension scheme before they fall due;

11.²⁰³

assets of a foreign state or a foreign central bank that serve sovereign purposes.

² Items for which it can be assumed from the outset that the surplus of the realisation proceeds over the costs would be so small that removal is not justified may not be distrained. However, they must be noted in the deed of distraint together with the estimated amount.²⁰⁴

³ High-value items in accordance with paragraph 1, numbers 1-3 are distrainable; However, they may only be taken away from the debtor if the creditor provides replacement items of the same utility value or the amount required to purchase them before they are taken away.²⁰⁵

⁴ The special provisions on undistrainability of the Federal Act of 2 April 1908²⁰⁶ on Insurance Policies (Arts 79 para. 2 and 80 IPA), the Copyright Act of 9 October 1992²⁰⁷ (Art. 18 CopA) and the Swiss Criminal Code²⁰⁸ (Art. 378 para. 2 SCC) remain reserved.²⁰⁹

¹ Earned income in any form, usufructs and their revenues, life annuities, and maintenance payments, pensions and payments in any form that compensate for a loss of income or a right to maintenance, in particular pensions and lump-sum payments that are not exempted from distraint under Article 92, may be distrained unless the debt enforcement officer is of the view that they are absolutely essential to the debtor and his family.

² Such income may be distrained for one year at the most; this period begins with the execution of distraint. If two or more creditors participate in the distraint proceedings, the period runs from the first distraint that is executed at the request of a creditor of the respective group (Arts 110 and 111).

³ If, during the period of such distraint, it comes to the attention of the office that the circumstances that are decisive in determining the distrainable amount have changed, the office shall modify the distraint proceedings to take account of the new circumstances.

⁴ At the request of the debtor, the office shall instruct the debtor's employer to transfer to the office, in addition, the amount required to pay the current premium and share of cost debts due to the compulsory health insurer for the duration of the distraint of earnings, insofar as these premiums and share of cost debts are part of the debtor's subsistence minimum. The office shall use this to settle the current premium and share of cost debts directly with the insurer.²¹¹

¹ Hanging and standing crops may not be distrained:

1.

in the meadows before 1 April;

2.

in the fields before 1 June;

3.

in the vineyards before 20 August.

² Any sale before or on the specified dates of harvested crops is invalid as against the distraining creditor.

³ The rights of a mortgagee to hanging and standing crops as part of the pledged property are reserved, but only on condition that the mortgagee himself has initiated enforcement proceedings for realisation of the mortgage²¹² before the realisation of the pledged crops takes place.²¹³

¹ Money, banknotes, bearer instruments, bills of exchange and other endorsable papers, precious metals and other valuables shall be held in safekeeping by the debt enforcement office.²²¹

² Other movable items may be left temporarily in the possession of the debtor or a third-party holder against the undertaking to keep them available at all times.

³ However, these items must also be taken into official safekeeping or handed over to a third party for safekeeping if the debt enforcement officer deems it appropriate or the creditor can credibly demonstrate that this is necessary to secure his rights established by distraint.²²²

⁴ The debt enforcement office may also take possession if a third party has a pledge on the property. If it is not realised, it shall be returned to the pledgee.

When distraining claims or other rights for which there is no document made out to the holder or transferable by endorsement, a debtor of the debtor subject to enforcement shall be informed that he may only make legally valid payments to the debt enforcement office.

The debt enforcement office shall ensure that the distrained rights are maintained and shall collect payment for debts due.

If a usufruct or a share in an undistributed estate, joint property or other joint assets is distrained, the debt enforcement office shall notify the third parties involved of the distraint proceedings.

On request, the creditor shall advance the costs of storage and maintenance of distrained assets to the debt enforcement office.

¹ If it is asserted that a third party has the ownership of, a pledge on or another right to the distrained item that prevents distraint or that must be taken into account in the further course of the enforcement proceedings, the debt enforcement office shall note the third party's claim in the deed of distraint or, if the deed has already been served, notify the parties separately.

² Third parties may file their claims as long as the proceeds from the realisation of the distrained item have not yet been distributed.

³ After realisation, the third party may assert the claims to which it is entitled under civil law in the event of theft, loss or other misappropriation of a movable item (Arts 934 and 935 CC²²⁹) or in the event of bad faith on the part of the acquirer (Arts 936 and 974 para. 3 CC) outside the debt enforcement proceedings. A public auction within the meaning of Article 934 paragraph 2 CC shall also be deemed to be a private sale in accordance with Article 130 of this Act.

¹ Creditors who submit a request for continuation within 30 days of the execution of distraint shall participate in the distraint proceedings. The distraint proceedings shall be extended in each case to the extent necessary to cover all the claims of the creditor group.

² Creditors who only submit the request for continuation after the 30-day period has expired shall in the same way form additional groups with separate distraint proceedings.

³ Assets that have already been distrained may be distrained again, but only to the extent that their proceeds are not to be paid to the creditors for whom the previous distraint proceedings were carried out.

¹ The following persons may participate in the distraint proceedings within 40 days of their execution without bringing debt enforcement proceedings beforehand:

1.²³⁶

the debtor's spouse or registered partner;

2.²³⁷

the debtor's children for claims arising from the parental relationship and adult persons for claims arising from an advance care directive (Arts 360-369 CC²³⁸);

3.²³⁹

the debtor's adult children and grandchildren for claims arising from Articles 334 and 334^bis CC;

4.

the debtor's beneficiary under a lifetime maintenance agreement for his claim for compensation under Article 529 CO²⁴⁰.

² The persons mentioned in paragraph 1 numbers 1 and 2 may only claim their rights if the distraint proceedings are carried out during or within one year of the end of the marriage, the registered partnership, the parental relationship or the period in which the advance care directives is in effect; the duration of litigation or debt enforcement proceedings is not included in the calculation. The child and adult protection authority may also file a declaration of intention to participate on behalf of the children or of a person subject to an adult protection measure.²⁴¹

³ Where the debt enforcement office is aware of persons entitled to participate, it shall notify these persons of the distraint proceedings by standard post.

⁴ The debt enforcement office shall notify the debtor and the creditors of any such claim that is made and allow them ten days within which to dispute the claim.

⁵ If the claim is contested, the claimant may only participate with the rights under provisional distraint proceedings, and the claimant must bring an action within 20 days in the court at the place of debt enforcement; if he fails to meet this deadline, his right to participate becomes invalid. …²⁴²

¹ In any distraint proceedings, a document (the deed of distraint) signed by the officer or employee carrying out the proceedings must be recorded. The document shall list the creditor and the debtor, the amount of the claim, the date and time of distraint, the distrained assets and their estimated value and, if applicable, the claims of third parties.

² If goods are distrained that are already subject to an attachment, the participation of the attachment creditor in the distraint proceedings (Art. 281) shall be noted.

³ If no distrainable assets are available or the assets are insufficient, this fact shall be noted in the deed of distraint.

If new creditors take part in distraint proceedings or if the distraint proceedings are expanded, this shall be added subsequently to the deed of distraint.

The debt enforcement office shall serve the creditors and the debtor with a copy of the deed of distraint immediately on expiry of the 30-day deadline for participation.

¹ If no distrainable assets were available, the deed of distraint serves as the unpaid debt certificate in terms of Article 149.

² If insufficient assets were available in the estimation of the officer, the deed of distraint shall serve the creditor as a provisional unpaid debt certificate and as such has the legal effects mentioned in Articles 271 number 5 and 285.

³ The provisional unpaid debt certificate also confers on the creditor the right to request the distraint of assets newly discovered within the one-year deadline under Article 88 paragraph 2. The provisions on participation in distraint proceedings (Arts 110 and 111) apply.²⁴⁵

¹ The creditors may request the realisation of distrained movable assets, claims and other rights no earlier than one month and at the latest one year after distraint, and the realisation of distrained immovable property no earlier than six months and at the latest two years after distraint.

² Where a future salary has been distrained, and if the employer has not paid over the distrained amounts by the date on which they were due for payment, the realisation of the claim to these amounts may be requested within 15 months after distraint.

³ Where the distraint proceedings have been extended because of the participation of several creditors, these deadlines shall run from the last successful additional distraint procedure.

¹ Each individual participant in a group of creditors has the right to request realisation.

² Creditors who have distrained assets in accordance with Article 110 paragraph 3 only for the additional proceeds may also request their realisation.

Creditors whose distraint proceedings are merely provisional may not request realisation. During the provisional period, he deadlines in Article 116 do not apply to such creditors.

¹ The distrained assets shall be realised in accordance with Articles 122-143a.

² Realisation is suspended as soon as the proceeds reach the total amount of the claims for which distraint is provisional or definitive. Article 144 paragraph 5 is reserved.

The debt enforcement office shall notify the debtor within three days of the request for realisation.

If the request for realisation is not made within the statutory deadline or is withdrawn and not filed again, the debt enforcement proceedings shall lapse.

A sale by private contract may be held instead of an auction:²⁶⁴

1.²⁶⁵

if all parties involved expressly agree;

2.

if securities or other items with a market or stock exchange price are to be realised²⁶⁶ and the price offered is equal to the current market price;

3.²⁶⁷

if this price is offered for items made of precious metal for which the bids at the auction did not reach the metal value;

4.

in the case of Article 124 paragraph 2.

¹ Monetary claims of the debtor which have no market or stock exchange price shall, if all distraining creditors so request, be assigned either to all the creditors or to individual creditors for joint account at nominal value in lieu of payment. In this case, the creditors shall assume the rights of the debtor subject to debt enforcement up to the amount of their claims.

² If all distraining creditors agree, they or individual creditors may assert distrained claims in their own name and for their own account and risk, without prejudice to their rights as against the debtor subject to debt enforcement. They shall require authorisation from the debt enforcement office to do so. The result serves to cover the expenses and claims of those creditors who have proceeded in this way. Any surplus must be paid to the debt enforcement office.²⁶⁸

¹ If assets of a different nature are to be realised, such as a usufruct or a share in an undistributed estate, ownership in undivided shares, in partnership property or in another form of communal property, the debt enforcement officer shall request the supervisory authority to determine the procedure.

² The same rule applies to the realisation of inventions, plant variety rights, industrial designs and models, trademarks and copyrights.²⁷⁰

³ The supervisory authority may, after hearing the parties involved, order the auction, delegate realisation to an administrator or make other arrangements.

¹ Realisation may only be contested by means of an appeal against the auction sale or the sale by private contract.

² The period allowed to file the appeal under Article 17 paragraph 2 begins when the appellant has become aware of the contested act of realisation and the grounds for contesting the same have become apparent to him.

³ The right of appeal expires one year after realisation.

¹ Properties shall be sold by public auction by the debt enforcement office no earlier than one month and no later than three months after receipt of the request for realisation.

² At the request of the debtor and with the express consent of all distraining and mortgagees, realisation may take place even if no creditor is yet entitled to demand it.

The provisions on the sale and the coverage principle (Art. 126) and on the waiver of realisation (Art. 127) apply.

¹ If payment is not made on time, the sale shall be cancelled and the debt enforcement office shall immediately order a new auction. Article 126 applies.²⁸⁵

² The former successful bidder and his guarantors shall be liable for the loss and any further damage. Interest shall be charged on the loss at five per cent.

Articles 123 and 132a also apply to the realisation of immovable property.

¹ A sale by private contract may take the place of an auction if all parties involved are agree and at least the valuation price is offered.

² The sale may only take place after the proceedings to agree on the encumbrances has been carried out in accordance with Article 138 paragraph 2 number 3 and paragraph 3 and Article 140 and in corresponding application of Articles 135-137.

¹ The proceeds shall be distributed as soon as all the assets subject to distraint are realised.

² Assets may however be provisionally distributed beforehand.

³ First of all, the costs of administration, realisation, the distribution of the proceeds and if applicable the purchase of a replacement item (Art. 92 para. 3) shall be paid from the proceeds.²⁸⁸

⁴ The net proceeds shall be paid out to the participant creditors up to the amount of their claims, including interest to the time of final realisation and the costs of debt enforcement (Art. 68).²⁸⁹

⁵ The amounts related to claims subject to provisional distraint are deposited temporarily in the official depositary.

¹ If the proceeds do not cover the amount of the claims, the debt enforcement office shall immediately execute additional distraint proceedings and realise the assets as quickly as possible. A special request by a creditor is not necessary and the office is not bound by the ordinary time limits.

² If further distraint proceedings have been carried out in the meantime, the rights arising from them shall not be affected by the subsequent distraint proceedings.

³ The provisions on participating in distraint proceedings (Arts 110 and 111) apply.

¹ If a creditor's claim is fully satisfied, the creditor must endorse the document acknowledging the debt and hand it over to the debt enforcement officer to be passed on to the debtor.³⁰⁰

² If a claim is only partially satisfied, the creditor retains the document; the debt enforcement office must certify on the same or have the competent authority certify the amount of debt still due.

³ In the case of the realisation of immovable property, the debt enforcement office shall arrange for the necessary deletions and amendments to easements, real burdens, mortgages and registered personal rights in the land register.³⁰¹

If the debtor is subject to debt enforcement through bankruptcy, the debt enforcement office shall give notice of impending bankruptcy immediately on receipt of the request for continuation.

¹ The notice of impending bankruptcy contains:

1.

the details of the request for debt enforcement;

2.

the date of the summons for payment;

3.³²⁸

notice that the creditor may file a petition for bankruptcy after 20 days;

4.³²⁹

notice that the debtor who wishes to contest the admissibility of debt enforcement through bankruptcy must appeal to the supervisory authority within ten days (Art. 17).

² The debtor is also reminded that he is entitled to propose a composition agreement.

¹ Article 72 applies to the service of the notice of impending bankruptcy.³³⁰

² A copy thereof shall be served on the creditor as soon as service has been effected on the debtor.

³ …³³¹

The court responsible for opening bankruptcy proceedings (bankruptcy court) shall, at the request of the creditor, order an inventory of all the debtor's assets (inventory of assets) to be recorded if this appears necessary for the creditor's security.

¹ The debt enforcement office shall record the inventory of assets. It may not begin until the notice of impending bankruptcy has been served, except in the cases referred to in Articles 83 paragraph 1 and 183.³³²

² Articles 90-92 apply accordingly.

¹ Once 20 days have elapsed since service of the notice of impending bankruptcy, the creditor may file a petition for bankruptcy with the bankruptcy court by submitting the notice of impending bankruptcy and the summons for payment.

² This right expires 15 months after service of the summons for payment. If an objection to the summons has been filed, this period shall be suspended between the initiation and conclusion of any legal proceedings brought as a result.³³⁶

If the creditor withdraws the bankruptcy petition, he may not file it again before one month has lapsed.

If the bankruptcy petition has been filed, the parties shall be given notice of a court hearing at least three days in advance. They shall be free to appear in court, either in person or by proxy.

¹ The person who files the bankruptcy petition is liable for the costs incurred up to and including the discontinuation of bankruptcy proceedings due to a lack of assets (Art. 230) or until the call to creditors (Art. 232).³³⁷

² The court may demand an advance of the costs from the creditor.

Immediately after the petition for bankruptcy has been filed, the court may issue interim orders necessary to safeguard the rights of the creditors.

The court shall issue its decision without delay, even in the absence of the parties. It shall declare bankruptcy unless one of the cases mentioned in Articles 172-173a applies.

The court shall dismiss the bankruptcy petition:

1.

if the notice of impending bankruptcy has been revoked by the supervisory authority;

2.³³⁹

if the debtor has been granted the reinstatement of a deadline (Art. 33 para. 4) or a subsequent objection to the summons for payment has been allowed (Art. 77);

3.

if the debtor proves by documentary evidence that the debt, including interest and costs, has been repaid or that the creditor has granted the debtor a deferral.

¹ If the bankruptcy petition relates to a debtor that is subject to the bankruptcy jurisdiction of the Swiss Financial Market Supervisory Authority (FINMA) under the financial market legislation in accordance with Article 1 of the Financial Market Supervision Act of 22 June 2007³⁴⁷, the bankruptcy court shall refer the files to FINMA. The latter shall proceed in accordance with the special rules.

² Only debtors who have the required FINMA licence are subject to FINMA's bankruptcy jurisdiction.³⁴⁸

¹ The decision of the bankruptcy court may be contested within ten days by means of an appeal in accordance with the CPC³⁵⁰. The parties may assert new facts if these occurred before the decision of the court of first instance.

² The appellate court may revoke the declaration of bankruptcy if the debtor provides credible evidence of his solvency and proves by documentary evidence that in the meantime:

1.

the debt, including interest and costs, has been repaid;

2.

the amount owed has been deposited with the superior court for transfer to the creditor; or

3.

the creditor no longer wishes to continue with the process of debt enforcement through bankruptcy.

³ If it grants the appeal suspensive effect, it shall at the same time take the necessary interim measures to protect the creditors.

¹ The debtor may file a written objection with the debt enforcement office within five days of service of the summons for payment; when doing so, he must demonstrate that any one of the conditions set out in Article 182 is met. On request, the debt enforcement office shall confirm the filing of an objection to the summons free of charge.

² By stating the grounds for objecting to the summons, the debtor does not waive further defences under Article 182.

³ Article 33 paragraph 4 does not apply.

¹ The enforcing creditor shall be informed of the grounds for the objection to the summons for payment on the copy of the summons given to him; if no objection to the summons has been filed, this is noted on the same.

² This copy shall be served on the debtor immediately after the objection to the summons has been filed or, if no objection has been filed, immediately after the expiry of the deadline for filing the same.

The debt enforcement office shall immediately submit the objection to the summons for payment to the court at the place of debt enforcement. The court shall summon the parties and issue a decision, even in their absence, within ten days of receipt of the objection to the summons.

The court shall approve the objection to the summons for payment:

1.

if it is proven by documentary evidence that the debt has been paid to the holder of the bill of exchange or cheque or that it has been discharged or deferred by him;

2.

if it is credibly asserted that the bill was forged;

3.

if a defence arising from the bill of exchange rights appears justified;

4.³⁵⁸

if another defence admissible under Article 1007 CO³⁵⁹ is credibly asserted; in this case, however, the amount claimed must be deposited in cash or securities, or equivalent security must be provided.

¹ If the court refuses to approve the objection to the summons for payment, it may take interim measures, and in particular order the recording of an inventory of assets in accordance with Articles 162-165.

² If necessary, the court may also require the creditor to provide security.³⁶⁰

¹ Notice of the decision on approving the objection to the summons for payment shall be given to the parties immediately.³⁶¹

² If the objection to the summons has only been approved after the amount in dispute has been deposited, the creditor shall be requested to raise a claim for payment within ten days. If the creditor does not comply with this request, the deposit shall be returned.

The decision on the approval of objection to the summons for payment may be contested within five days by an appeal under the CPC³⁶³.

If the objection is approved, the debt enforcement proceedings shall be discontinued; the creditor must pursue his claim through ordinary civil proceedings.

¹ All distrainable assets belonging to the debtor at the time that bankruptcy is declared, regardless of where they are located, form a single estate (the bankruptcy estate) which serves to satisfy the creditors jointly.³⁷³

² Assets that accrue to the debtor³⁷⁴ before the end of the bankruptcy proceedings are also part of the bankruptcy estate.

Assets subject to pledge shall be included in the bankruptcy estate, subject to any preferential rights granted to the pledgees.

¹ Assets secured by a pledge which have not been realised by the time of declaration of bankruptcy and attached assets shall be included in the bankruptcy estate.

² However, distrained cash amounts, amounts surrendered in the case of distraint proceedings of claims and income and the proceeds of assets already realised shall be distributed in accordance with Articles 144-150, provided the time limits for participating in distraint proceedings (Arts 110 and 111) have expired; any surplus falls into the bankruptcy estate.³⁷⁵

The bankruptcy estate also includes any assets and claims that are subject of an action for avoidance in accordance with Articles 214 and 285-292.

Where a bearer security or instrument to order is in the debtor's possession but has been handed over to him or endorsed in his favour merely for collection or as cover for a specified future payment, the person who handed over or endorsed the security or instrument may demand its return.

If the debtor has sold an item that does not belong to him and has still to receive the purchase price at the time that bankruptcy is declared, the previous owner may, by paying what is due to the debtor, request the assignment of the claim against the purchaser or restitution of the purchase price where it has in the meantime been collected by the bankruptcy administration.

¹ If an item which the debtor has purchased and not yet paid for has been dispatched to him but has not yet passed into his possession at the time that bankruptcy is declared, the seller may demand its return unless the bankruptcy administration pays the purchase price.

² However, a right of return is excluded if the item was acquired as property or a pledge by a third party acting in good faith on the basis of a waybill, bill of lading or consignment note prior to the public announcement of bankruptcy.

¹ A creditor may set off his claim against a claim against him to which the debtor is entitled.

² However, offsetting is not permitted:

1.³⁸⁸

if a debtor of the bankrupt becomes his creditor only after bankruptcy is declared, unless the debtor has fulfilled an obligation entered into beforehand or redeemed an item that is liable as a pledge for the debtor's debt and to which it is entitled to ownership or a limited right in rem (Art. 110 no 1 CO³⁸⁹);

2.

if a creditor of the debtor only becomes a debtor of the debtor or the bankruptcy estate after bankruptcy is declared.

3.³⁹⁰

…

³ Offsetting against claims arising from bearer securities is permitted if and insofar as the creditor proves that he acquired them in good faith prior to bankruptcy being declared.³⁹¹

⁴ In the event of the bankruptcy of a limited partnership, a company limited by shares, a partnership limited by shares, a limited liability company or a co-operative, the partners' specific contributions or the share capital that have not been fully paid up and contributions to the co-operative may not be offset.^{392 393}

Offsetting may be contested if a debtor of the bankrupt³⁹⁴ has acquired a claim against the bankrupt prior to bankruptcy being declared but with knowledge of the bankrupt's insolvency in order to obtain an advantage for himself or another person by means of offsetting, to the detriment of the bankruptcy estate.

¹ Claims arising from contracts of surety entered into by the debtor may be asserted in bankruptcy, even if they are not yet due.

² The bankruptcy estate is subrogated to the creditor's rights as against the principal debtor and any co-sureties in respect of the amount that it pays (Art. 507 CO³⁹⁵). However, if bankruptcy proceedings are also instituted against the principal debtor or a co-surety, Articles 216 and 217 apply.³⁹⁶

¹ If bankruptcy is declared simultaneously against two or more co-obligors, the creditor may assert his claim in full in each bankruptcy.

² If the allocations from the various bankruptcy estates exceed the amount of the entire claim, the surplus shall revert to the estates in accordance with the rights of recourse existing among the co-obligors.

³ If the total amount of the allocations does not reach the full amount of the claim, the estates have no recourse against each other for any instalments paid.

¹ If a creditor has received partial satisfaction of his claim from a co-obligor of the debtor, the claim shall nevertheless be included in the bankruptcy of the latter in its full original amount, irrespective of whether the co-obligor is entitled to recourse against the debtor or not.

² The creditor and the co-obligor are both entitled to file the claim in bankruptcy.

³ The creditor is entitled to a share of the bankruptcy estate attributable to the claim until it has been satisfied in full. A co-obligor entitled to recourse receives the amount from the surplus that he would receive if he had asserted his right of recourse independently. The residue remains for the estates.

¹ If a general partnership and any of its partners are simultaneously declared bankrupt, the creditors of the partnership may only assert in the bankruptcy of the partner that part of their claims that remained unpaid in the bankruptcy of the partnership. The provisions of Articles 216 and 217 apply with regard to the payment of this residual debt by the individual partners.

² If bankruptcy proceedings are instituted against a partner but not simultaneously against the partnership, the creditors of the partnership may assert their claims in full in the bankruptcy of the partner. The bankruptcy estate is entitled to the rights of recourse granted by Article 215 to the bankruptcy estate of a surety.

³ Paragraphs 1 and 2 apply mutatis mutandis to partners with unlimited liability in a limited partnership.³⁹⁷