My rights after personal bankruptcy
My rights after personal bankruptcy
"I ran a sole proprietorship for 10 years. Various events led to my personal bankruptcy. I would like to know what my rights and obligations are in the event of inheritance, the purchase of property or with regard to my personal bank accounts.
C, Meyrin
The two main forms of debt collection are seizure and bankruptcy. Basically, debtors entered in the commercial register, i.e. in particular traders, companies, foundations and certain associations, are subject to bankruptcy, whereas private individuals are not, in principle.
Under the Federal Law on Debt Collection and Bankruptcy, a debtor can file for personal bankruptcy by declaring himself insolvent in court. However, the judge will only declare bankruptcy if there is no possibility of an amicable debt settlement.
Once the bankrupt's assets have been distributed among the various creditors, the bankruptcy administration issues a certificate of default to those who have not been paid. This deed confers certain advantages on its holder, including the fact that the claim is not subject to any statute of limitations for twenty years. The debtor may, however, oppose further proceedings based on this deed of default by alleging that he has "failed to recover his debts". This principle is designed to help debtors recover from bankruptcy and build a new economic existence.
The debtor is deemed to have returned to better financial circumstances when he or she has not only succeeded in securing a minimum standard of living, but is also leading a decent life while acquiring new assets. The law also specifies that new assets available to the debtor are considered to be better fortunes. So if the debtor is unable to save, there is no return to better fortunes.
The Federal Court considers that income from work can constitute a new asset when it exceeds the amount necessary for the debtor to lead a life in keeping with his condition and enables him to make savings. Therefore, if the debtor has income that ensures a relatively decent standard of living and also enables him or her to build up some savings, the debtor is exposed to further legal action.
It is clear from the above that if you have returned to a better situation, thanks in particular to an inheritance or savings, you may not be able to oppose any former creditors who hold default certificates, if they request a new debt collection action against you.
