Debt Collection and Contractual Liability

Debt Collection Lawyer in Lugano

Haab Legal assists creditors at every stage of the procedure under the Federal Act on Debt Enforcement and Bankruptcy (DEBA): from the out-of-court demand to the payment order, from the objection to its dismissal, from the attachment to the declaration of bankruptcy. The DEBA procedure is an administrative-judicial process, fast and effective, but it requires compliance with strict deadlines and precise formalities.

The stages of DEBA enforcement proceedings

1. Demand and default notice

Before starting a payment order, a formal default notice (art. 102 CO) setting a period of 10-30 days to pay is always advisable. The default notice binds the debtor to default interest (5% statutory or the contractual rate), often prompts spontaneous payment to avoid the costs of the procedure, and creates useful documentation for the next stage.

2. Payment order

The payment order (art. 67 et seq. DEBA) is the formal demand for payment served on the debtor through the Debt Enforcement Office of their domicile. Three types: enforcement by seizure (non-trader debtors), enforcement by bankruptcy (debtors entered in the Commercial Register), enforcement by realisation of pledge (secured claims).

Cost of the payment order: a few hundred francs plus an advance for the fees, regardless of the value of the claim. The payment order must state the cause of the claim, the amount and the due date. Weak contractual contexts (generic cause, lack of a precise due date) make it difficult to enforce the claim in the event of an objection.

3. The debtor's objection

The debtor has 10 days from service to file an objection to the payment order (art. 74 DEBA). The objection blocks the procedure: to proceed, the creditor must obtain dismissal of the objection before the District Court. Two types of dismissal:

• Provisional dismissal (art. 82 DEBA): if the claim is based on a written acknowledgement by the debtor (signed contract, acknowledgement of debt, written confirmation). The debtor may still contest on the merits with an action for non-recognition of the debt within 20 days.
• Definitive dismissal (art. 80 DEBA): if the claim is based on a final and enforceable judgment or an enforceable public deed. Final decision, no further objection.

4. Seizure or bankruptcy

If the debtor does not object (or if the dismissal becomes final), the realisation stage begins: seizure of assets for non-trader debtors, or threat of bankruptcy for trader debtors (art. 159 DEBA), with a declaration of bankruptcy by the District Court if the debt is not paid within 20 days of the threat.

Attachment (art. 271 DEBA)

The attachment is the DEBA precautionary measure to freeze the debtor's assets when there is a risk that they will be removed before the ordinary procedure. Five cases listed in art. 271 DEBA: 1) debtor without fixed domicile; 2) debtor in flight or dissipating assets; 3) debtor in transit; 4) debtor resident abroad with no forum in Switzerland; 5) creditor holding a definitive dismissal title.

The procedure is unilateral and urgent: the court decides on the basis of the creditor's application, without hearing the debtor. The creditor must make the claim, the case of attachment and the existence of attachable assets credible. In return, they must provide security for the damage the attachment could cause if unfounded (usually 5-10% of the value attached). Once granted, the attachment must be validated by a payment order within 10 days.

Statutory contractors' lien

For claims of craftsmen and construction firms who have supplied materials or carried out works on a property, art. 837 CC provides for a statutory lien that can be entered in the Land Register without the owner's consent. Registration deadline: 4 months from the last work carried out or material delivered. A powerful tool because it burdens the property directly and ranks ahead of unsecured creditors. For Ticino construction-sector entrepreneurs it is a security to be activated whenever the client is unreliable.

When action makes sense

The practical rule: DEBA proceedings are worthwhile for any claim above CHF 1'000, because the base costs are low and the debtor usually pays on the first payment order to avoid entry in the public register of enforcements. For more complex claims or claims disputed on the merits, one considers a precautionary attachment, an action for non-recognition, or a settlement with a 20-30% discount to collect at once instead of chasing the debtor for years.