Blocked bank account

Blocked bank account

"Following an unpaid bill of around one thousand francs, the bank informed me that it was temporarily blocking my account and had sent the statement to the Debt Collection Office. The latter had obviously contacted the banks to find out if they held an account in my name, with orders to freeze it if necessary. Is this a legal procedure?

Daniel, Geneva

The Federal Law on Debt Collection and Bankruptcy (LP) allows the assets of a debtor who persists in refusing to pay his debt to be temporarily frozen.

This instrument, known as "sequestration" (art. 271 ff LP), which has its counterpart in criminal proceedings, is designed to prevent the voluntary disappearance of certain assets of a recalcitrant debtor.

This measure is only possible in the cases listed exhaustively in the law, i.e. when the debtor has no fixed address or is likely to prepare to flee in order to avoid his obligations; when the debtor is passing through and his debt is immediately due; when the debtor does not live in Switzerland and provided that there is no other case of sequestration or when the creditor has a provisional or definitive certificate of default or a definitive discharge order against the debtor.

In practical terms, the creditor will be able to apply to the judge for a sequestration order provided that not only is there a case of sequestration as described above, but that it also makes the existence of the assets sought likely.

More specifically, the creditor must specify precisely what type of assets he intends to sequestrate and convince the judge that the assets are located in Switzerland and belong to the debtor and not to a third party.

Secondly, with regard to the duty to provide information, article 91 of the LP provides that third parties holding assets of the debtor or third parties against whom the debtor has claims are obliged to provide information to the judicial authorities. If the bank, for example, refuses to pass on the information, it is liable to criminal penalties (art. 324 of the Criminal Code).

It is important to emphasise that sequestration is lawful only when the value of the blocked assets is proportionate to the amounts sought. The provisions relating to the minimum subsistence figure and unseizable assets apply to the remainder.

Finally, you should know that anyone whose rights are affected by a sequestration order may lodge an objection with the judge within ten days, and that in the event of an unjustified sequestration order, the creditor is liable for any damage caused to both the debtor and the bank.