Filing a Claim in Bankruptcy

Filing a Claim in Bankruptcy in Switzerland

The bankruptcy procedure in Switzerland requires particular attention from creditors wishing to recover their assets. The filing of a claim constitutes a fundamental step in this process, as it allows one to officially assert one's rights over the assets of the bankrupt debtor. Without this step, a creditor risks losing all hope of recovery, even if their claim is perfectly legitimate. The Swiss legal framework, governed principally by the Federal Act on Debt Enforcement and Bankruptcy (DEBA), establishes a structured process with strict deadlines and precise formalities. This procedure requires an in-depth understanding of the legal and administrative mechanisms to optimise the chances of recovery in a context where available assets are often insufficient to satisfy all creditors.

Legal Foundations of Claim Filing in Swiss Law

Filing a claim in bankruptcy fits within a precise legal framework in Switzerland. The Federal Act on Debt Enforcement and Bankruptcy (DEBA) constitutes the principal legal basis, supplemented by the Ordinance on the Administration of Bankruptcy (OAB) and the case law of the Federal Supreme Court. Under article 232 DEBA, the Bankruptcy Office must publish the opening of bankruptcy and issue a call to creditors to file their claims within a specified period.

The concept of a claim in Swiss law encompasses any monetary pretension that one legal subject (the creditor) may assert against another (the debtor). In the context of bankruptcy, these claims must exist at the time of the opening of the procedure. Conditional or undue claims may be filed, but their treatment is subject to special rules.

The Swiss system classifies claims according to three priority ranks defined in article 219 DEBA:

• First rank: workers' claims, compulsory insurance premiums, certain maintenance claims
• Second rank: social insurance contributions
• Third rank: all other claims

This hierarchy has a direct impact on the chances of recovery, since creditors of lower ranks may only be satisfied after full payment of creditors of higher ranks.

The Federal Supreme Court has clarified several aspects of claim filing. For example, BGE 138 III 11 confirmed that the late filing of a claim is admissible until the close of bankruptcy, but only if the delay does not cause additional costs for the estate.

Swiss law recognises the possibility of assigning a claim to be filed in bankruptcy, in accordance with articles 164 et seq. of the Code of Obligations. This assignment must comply with the statutory formal conditions and be notified to the bankruptcy administration.

The Claim Filing Procedure: Steps and Formalities

The claim filing procedure begins from the publication of the opening of bankruptcy in the Swiss Official Gazette of Commerce (SOGC) and in the cantonal official gazettes. This publication marks the beginning of the filing period, generally set at one month under article 232 paragraph 2 number 2 DEBA, although the bankruptcy administration may extend it in certain circumstances.

To validly file a claim, the creditor must submit a written declaration to the bankruptcy administration, containing the following elements:

• The creditor's full identity (name, first name, address)
• The exact amount of the claim
• The legal cause of the claim
• Any security or privileges claimed

The filing must be accompanied by supporting evidence justifying the existence and amount of the claim: contracts, invoices, acknowledgements of debt, judgments, etc. A simple assertion is not sufficient; the creditor must demonstrate the merits of their pretension.

Particularities for Certain Types of Creditors

Secured creditors must not only file their claim, but also precisely indicate the nature and value of the pledge. For creditors domiciled abroad, article 232 paragraph 2 number 3 DEBA provides that they must elect a domicile for service in Switzerland.

Joint and several creditors may file the entire claim, subject to the proviso that the total amount recovered does not exceed the amount due. Sureties who have paid the bankrupt's debt may be subrogated to the rights of the original creditor and file in their turn.

Consequences of Late or Defective Filing

A filing made after the expiry of the period remains admissible until the close of the liquidation, but the late creditor bears the additional costs occasioned by their late filing and may lose certain procedural rights, notably that of contesting the initial collocation schedule.

A defective filing (incomplete or imprecise) may be rejected by the bankruptcy administration. However, before a final rejection, the administration must generally invite the creditor to complete or clarify their filing within a reasonable period, in accordance with the principle of good faith that governs Swiss administrative procedure.

Verification of Claims and the Collocation Schedule

After receiving the filings, the bankruptcy administration begins an in-depth examination phase of each declared claim. This verification aims to establish the legitimacy of the pretensions and determine their rank in the order of priorities. The administration has extensive investigative powers: it may summon witnesses, require the presentation of additional documents or consult the bankrupt's accounting records.

The verification covers several aspects of the claim:

• The legal existence of the claim
• The exact amount due
• The validity of the security invoked
• The rank to be assigned under article 219 DEBA
• Any set-offs to be made against debts of the creditor to the bankrupt

The administration may admit the claim in full, partially or reject it. In complex cases, it may suspend its decision pending the outcome of pending litigation or invite the parties to have the dispute decided by the judge.

The Drawing Up of the Collocation Schedule

The results of this verification are recorded in an official document called the collocation schedule. Governed by articles 247 to 251 DEBA, this document lists all filed claims with their status (admitted or rejected), their recognised amount and their rank. The collocation schedule constitutes the roadmap for the subsequent distribution of the estate assets.

Under article 249 DEBA, the administration deposits the collocation schedule and the asset inventory at the bankruptcy office, where they may be consulted by interested parties for 20 days. The deposit is the subject of an official publication which marks the beginning of the contestation period.

Remedies Against the Collocation Schedule

A creditor dissatisfied with the treatment of their claim or that of another creditor has 20 days to bring a collocation contestation action before the competent court of the place of the bankruptcy. This court action, governed by article 250 DEBA, may aim to:

• Have a rejected claim admitted
• Have a higher rank recognised
• Contest the admission of another claim
• Contest the rank assigned to another claim

The subsequent judicial procedure follows the ordinary rules of Swiss civil proceedings, with however some particularities specific to enforcement law. The judgment rendered may be appealed to the superior cantonal courts, then possibly before the Federal Supreme Court.

The collocation schedule becomes final for uncontested claims upon expiry of the 20-day period. For contested claims, it is necessary to await the outcome of the judicial proceedings.

Recovery Strategies and Special Privileges

Faced with a bankruptcy, creditors must develop adapted strategies to maximise their chances of recovery. The position in the order of ranks often determines the outcome of the process, but other mechanisms may strengthen the protection of creditors.

Secured claims benefit from privileged treatment. Swiss law recognises several types of security:

• Immovable pledges (statutory mortgages, mortgage certificates)
• Movable pledges (liens, pledges over claims)
• Personal security (suretyship, demand guarantees)
• Validly constituted retention of title

Secured creditors are paid in priority from the realisation proceeds of the pledged asset, after deduction of a contribution to the administration costs set by article 262 DEBA. If the proceeds are insufficient, the balance becomes a third-rank unsecured claim.

The Right of Retention and Set-Off

The right of retention, regulated by articles 895 to 898 of the Swiss Civil Code, allows the creditor to retain an asset belonging to the debtor until full payment of the debt. In bankruptcy, this right is practically equivalent to a pledge and confers a similar privilege.

Set-off constitutes another effective mechanism. Under article 213 DEBA, the creditor may set off their claim against a debt they have to the bankrupt, even if their claim is not yet due. This set-off operates automatically and allows one to avoid the uncertainties of distribution.

Set-Aside Actions

Articles 285 to 292 DEBA provide for the possibility of challenging certain acts of the debtor performed before bankruptcy (up to five years for certain acts) that diminished the assets available to creditors. These set-aside actions concern:

• Gratuitous acts and transactions for no consideration
• Certain acts performed when the debtor was already over-indebted
• The constitution of security for existing debts

These actions allow assets to be returned to the estate that were unduly removed from it, thus increasing the chances of recovery for all creditors.

Frequently Asked Questions on Filing a Claim in Bankruptcy