A bankruptcy remains registered for five years

A bankruptcy remains registered for five years

"I was personally bankrupt in 2015 and have since reached an arrangement with my creditors. All proceedings against me have been cancelled and the certificates of default have disappeared from the extract from the debt enforcement office. However, the bankruptcy with the opening and closing dates is still there. Can I have it removed?

Alain

The federal law on debt collection and bankruptcy stipulates that any third party with a plausible interest in consulting the registers of the debt collection and bankruptcy office may obtain an extract from them. This is because the records of the offices are public documents. According to the Federal Court, the public interest in being informed about the solvency of a business partner, or about the extent to which he is trustworthy, outweighs the protection of the personality of the person entered in these registers as a debtor.

In Switzerland, there is nothing to prevent a malicious person from prosecuting someone without cause. In order to protect the victim from such a procedure, the debt collection office does not have to communicate debt collection proceedings that have been cancelled or found to be unfounded. On the other hand, a debt collection action that has been paid by the debtor will appear on the extract from the register because the debt was actually owed. In such a case, only the creditor can order the removal of the entry from the register.

It should be explained that an insolvent debtor may himself request bankruptcy, which will be declared by the judge if an amicable settlement of debts is ruled out: this is commonly known as "personal bankruptcy". The advantage of this type of procedure for the debtor is that all legal proceedings instituted prior to the opening of the bankruptcy proceedings are stopped, and the introduction of new legal proceedings during the bankruptcy proceedings for claims arising prior to the opening of the bankruptcy proceedings is blocked. In addition, the bankruptcy renders null and void any seizures of income already in progress. All of the debtor's seizable assets will be realised to distribute the proceeds among the creditors, who will receive certificates of default for the uncovered portion of their claims.

The closure of the bankruptcy is pronounced by the judge, since it is no longer a question of simple private law relationships. As a result, it is a priori impossible to remove the mention of a bankruptcy from the extract issued by the debt enforcement and bankruptcy office. As the right of third parties to inspect the extract expires after five years, a bankruptcy will remain entered in the registers for the entire period, notwithstanding any arrangement with the creditors.