SARS-CoV-2 epidemic – extraordinary stay of all debt collection proceedings


The Swiss Federal council has released an ordinance granting a stay of all debt enforcement proceedings under art. 62 DEBA as it pertains to epidemics, in this case, SARS-CoV-2. The stay of enforcement proceedings was effective as of the 19th of March 2020 at 7 a.m. and will remain in place until midnight, 4th of April 2020. Legal Easter stay will then follow, extending therefore the suspension.

A stay of enforcement proceedings due to epidemics is an extraordinary case of collective suspension measures intended to protect both debtors and creditors. The Swiss Federal Council must expressly decide upon a set, limited period of time.

In normal times, other legal cases for individual stays of enforcement proceedings protecting a debtor are applicable in particular situations, which are automatic: military service, civil defense or community service, death of spouse or registered partner, imprisonment or serious illness (which may also apply to patients diagnosed with COVID-19 for the duration of their illness, irrespective of the timeframe established by the stay of enforcement proceedings declared by the Swiss Federal Council).

During a stay of enforcement, no enforcement measure may be carried out against a debtor by the enforcement authorities (i.e., the debt enforcement office, the supervisory authority, or the courts competent for the setting aside of the debtor's objection and, to a certain extent only, in case of bankruptcy and debt-restructuring moratorium).

According to the definition, as established by the Federal Supreme Court, enforcement acts are deemed to be all measures taken by enforcement authorities (cf. above), which seek to initiate or continue an enforcement proceeding to repay the claim of the creditor using the debtor's assets, and have consequences on the debtor's legal situation.

There is a significant, but sometimes contradictory casuistry regarding the definition of enforcement measures subject to the stay of enforcement. Nevertheless, the following principles are identifiable.

The service of a summon to pay, the seizure of assets, the seizure of wages, and the realisation of assets through auctions or private sale are deemed to be enforcement acts subject to the stay of enforcement proceedings.

The stay of enforcement also encompasses certain court proceedings and court judgments. Namely: the summons to appear at a setting aside hearing, the deadline set for the debtor to take a position on the setting aside request filed by a creditor in response to an objection raised against a summon to pay, and the granting and notification of the definitive or provisional setting aside of the objection. On the other hand, court judgments that materially settle a dispute (i.e., recognition of debt, debt relief action, annulment and suspension of the enforcement proceedings) are not affected by the stay of enforcement decreed by the Swiss Federal Council.

In bankruptcy matters, the bankruptcy warning, the order calling a bankruptcy hearing and the notification of a bankruptcy order may qualify as enforcement measures subject to the stay of enforcement. Bankruptcy proceedings without prior enforcement proceedings are to be treated as an enforcement actions; meaning, the notice of overindebtness (art. 725 al. 2 CO) must be filed with the competent court, but that a bankruptcy hearing cannot be called and take place during the suspension. Therefore, a bankruptcy order should not be issued during the suspension period, especially as many courts have adjourned their civil hearings sine die. It seems that liquidations of bankruptcies that have already been decided are not affected by the stay of enforcement proceedings. The bankruptcy office should be able to continue to act and officiate.

Conservatory measures, such as urgent measures intended to guarantee the proper conduct and effectiveness of enforcement proceedings, are not subject to suspension. Civil freezing injunctions, inventory orders, and blocking measures ordered by the judge before are consequently unaffected by the suspension.

The effect of such a stay of enforcement proceedings, as it pertains to an epidemic, on the duties and obligations of creditors is unclear; especially because of the rarity of a suspension measure due to epidemics, leading to an equivalent rarity in terms of court decisions and office practice. In any case, the stay of enforcement proceedings does not prevent a creditor from taking action against a debtor (commencement of enforcement proceedings, continuation of enforcement proceedings, request for realisation, filing requesting the bankruptcy etc.). These approaches will not, however, be followed by actions taken by the debt enforcement and bankruptcy offices. If the claim held by the creditor is likely to become time-barred, the creditor will have no choice but to start enforcement proceedings in order to safeguard its rights. As for the debt enforcement offices, they can continue to work on their cases and prepare communications that will be issued when the suspension expires.

We are of the opinion that enforcement measures carried out during the stay of enforcement proceedings pronounced due to an epidemic are null and void. In exceptional circumstances, an exceptional sanction is required. The deadlines, before the expiry of which (dies ad quem) the debtor or a creditor must imperatively act, shall not cease to run during the stay of enforcement proceedings, they shall rather be extended up to the third day following the suspension period, excluding Saturdays, Sundays, and state public holidays. In view of the decreed deadline, Saturday the 4th of April, which is immediately followed by the Easter legal stay, the deadlines will mostly be extended until the 22nd of April 2020.

The Federal Council also decided today to begin the Easter stay for all civil and administrative proceedings ahead of time; such stay shall start tomorrow and end on the 19th of April.


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