Whether or not to return to better fortune

Whether or not to return to better fortune

I've already had a hard enough time with my financial problems, which have resulted in certificates of default, but now a debt collection company is coming out of the woodwork and demanding a large sum from me by demanding that I produce my tax return! As I'm retired and have no new source of income, I'm not going to give anything away and I'm seriously wondering about the legality of this approach...

P., Geneva

Your refusal is justified. A creditor cannot ask you for personal documents out of the blue. Collection agencies are companies that specialise in recovering unpaid debts. They act in a private capacity, like any private individual, on behalf of creditors who have often assigned their claims to them.

Their actions are sometimes questionable, particularly when they are insistent or incisive without responding to the explanations they are given or, on the contrary, asked for, but like everyone else they must comply with the rules laid down by the Federal Law on Debt Collection and Bankruptcy (LP). When debt collection or bankruptcy proceedings end without the creditors having been paid in full, they receive a certificate of default. This document allows creditors to reclaim their debt from the debtor at any time, but generally when they learn that the debtor's financial situation has improved.

The debtor, for his part, will be able to contest this improvement by opposing a new lawsuit or by arguing that he has (not) returned to better fortunes since his bankruptcy. The purpose of this second defence is to enable the debtor to recover from bankruptcy and build a new life for himself, i.e. to re-establish himself economically and socially, without being constantly subject to the lawsuits of his former creditors.

The debtor has the right to lead a lifestyle in keeping with his or her situation, which implies having a basic amount to which must be added essential expenses such as rent, heating and health insurance premiums, as well as incompressible expenses such as tax. Other common expenses, such as those for a car, television, telephone or computer, or even some private insurance, can also be included in this calculation.

According to cantonal practice, the notorious "subsistence minimum" applicable to those being sued by way of seizure is thus increased by a variable percentage so that the needs of the bankrupt debtor are fully taken into account. This is the privilege granted to anyone who has tried to register with the Commercial Register in order to earn a living. If the debt collection agency that has contacted you initiates a new debt collection action against you, you will receive notification from the debt collection office, to which you can lodge a simple objection or an objection for failure to recover your debts, depending on your situation.

As part of this procedure, you may be asked to produce your tax return to prove that your situation has not improved; outside this framework, no one can force you to produce your tax return.