Debt can last a very long time
Debt can last a very long time
I have certificates of default dating back more than 20 years. Do I have to pay for these debts? If I pay in monthly instalments, is there a statute of limitations after 20 years? If, hypothetically, I can't pay, is it possible for my creditor to start proceedings again and obtain a new certificate of default valid for 20 years? Can this happen again and again?
Martin, Geneva
As a general rule, an action for payment of a claim is time-barred after 10 years from the due date, in accordance with art. 127 of the Swiss Code of Obligations. The law may provide for other time limits for certain types of claims, for example those of doctors or lawyers, which are time-barred after 5 years.
The limitation period may be interrupted by the creditor by means of an application for conciliation to the judge or by a request for proceedings addressed to the Debt Enforcement and Bankruptcy Office. Each act of prosecution interrupts the limitation period and starts a new period of the same duration. The debtor may also voluntarily interrupt the limitation period by acknowledging his debt, in particular by paying interest or instalments. For example, a person who owes CHF 100,000 and pays CHF 100 per month will not be able to stop payments after 10 years on the grounds that the debt is time-barred.
When the realisation of the debtor's assets is not sufficient to pay the creditors in full, a writ of default is issued at the end of the debt collection proceedings, whether by way of seizure (for private individuals) or bankruptcy (for companies). Under the Debt Enforcement and Bankruptcy Act, a debt established by a certificate of default is time-barred after 20 years. A creditor who has the benefit of such a deed must therefore take action within 20 years of its issue, failing which his claim will be rejected on the grounds that it is time-barred. It should be noted that the bankrupt debtor may nevertheless raise the plea of non-return to better fortunes, which will be referred to the judge to determine whether the plea is based on relevant facts.
If it turns out that the debtor is indeed unable to pay the sum due, a new certificate of default will be issued to the creditor, who will have a further 20 years in which to take action against him. Consequently, if the creditor is diligent and resumes proceedings every 20 years, as the law stands at present, his claims will never be completely time-barred.
