Debt collection and foreclosure: Expiry under SchKG

Introduction

Swiss enforcement law clearly regulates how outstanding claims can be collected and, if necessary, realized through forced auctions of assets. The basis is the Federal Act on Debt Collection and Bankruptcy (SchKG), which defines a transparent, legally defined process.

Forced auctions serve not only to satisfy creditor claims but also to protect debtor rights. The system is designed to ensure fairness and transparency - a principle that is implemented in Switzerland through the high professionalism of the cantonal debt enforcement offices.

The SchKG as the Legal Basis

The Debt Collection and Bankruptcy Act (SchKG) has been the central legal basis for all enforcement and realization procedures in Switzerland since 1889. It defines in detail when and how assets may be used to cover claims. A particularly important distinction is made between seizure, bankruptcy, and collateral realization - depending on whether it concerns an individual, a company, or secured claims.

For real estate, the collateral realization is the crucial path. It usually leads to a forced auction, where the property is sold publicly to settle the outstanding debt.

Step-by-Step: Process of a Debt Collection According to SchKG

1. Debt Collection Request

The creditor submits a debt collection request to the competent debt enforcement office - for example, in Zurich (ZH), Bern (BE), or Lucerne (LU). The office reviews the documents and issues a payment order to the debtor. From this moment on, the debtor has 10 days to either pay or raise an objection.

2. Objection and Removal

If the debtor raises an objection, the process is temporarily halted. The creditor must prove their claim, for example, through a legally binding decision, an acknowledgment of debt, or a court title. If the objection is removed, the enforcement continues.

3. Continuation Request

After the statutory period has expired, the creditor can submit a continuation request to the debt enforcement office. Depending on the type of claim, either:

• a seizure (for unsecured claims),
• a bankruptcy enforcement (for companies), or
• a collateral realization (for mortgages or property liens).

4. Announcement of Realization

The debt enforcement office announces the realization of the affected property. This announcement is published in the cantonal official gazette and on platforms like LocalAuction.ch. This ensures transparency, and interested buyers receive early access to relevant information.

5. Public Auction

The forced auction takes place publicly and under the supervision of the debt enforcement office - for example, in Ticino (TI), Vaud (VD), or St. Gallen (SG). Bidders must register in advance and often provide a security deposit. The highest bid wins. The proceeds are used in the following order:

1. Payment of the costs of the procedure,
2. Settlement of the secured claim (e.g., mortgage),
3. Payment of any surplus to the debtor.

6. Transfer of Ownership

After payment of the bid amount and the expiration of statutory deadlines, the transfer of ownership takes place in the land register. The debt enforcement office confirms the handover, and the new owner receives the property free of encumbrances - a significant advantage for buyers.

Particularities of Collateral Realization

In collateral realization, the object itself serves as security for the loan. If the loan is no longer serviced, the creditor can demand realization - regardless of the debtor's overall financial situation.

This particularly often affects mortgages, for example, for properties in Aargau (AG) or Valais (VS). In these cases, forced auctions are used as an economically ordered means to cover the claim while simultaneously ensuring legal certainty for all parties involved.

Rights and Protection Mechanisms for Debtors

The SchKG places great emphasis on debtor protection. The goal is not to punish individuals but to create fair conditions. The most important protection mechanisms include:

• Objection: The debtor can contest the claim if it is unjustified.
• Minimum Bid Requirement: Properties may not be awarded below 2/3 of the appraised value, unless the creditor opposes.
• Transparent Auction: All steps are publicly documented and traceable.

This prevents assets from being sold below value or debtors from being unduly disadvantaged.

“Swiss enforcement law combines efficiency with fairness - a model that connects creditor protection with social responsibility.”

The Role of Digitalization and Platforms like LocalAuction.ch

In recent years, digitalization has fundamentally changed the process of forced auctions. Platforms like LocalAuction.ch consolidate all official proceedings in Switzerland and make them accessible online - from Zug (ZG) to Geneva (GE).

Buyers benefit from a central overview of all properties, while creditors and authorities benefit from increased reach and more efficient communication. Publication on LocalAuction.ch also fosters competition and prevents properties from being sold "under the table" or under opaque terms.

Conclusion

The forced auction according to SchKG is a precisely regulated, transparent process that guarantees legal certainty and fairness for all parties involved. Thanks to the federal structure and digitalization, Switzerland is a pioneer in the efficient handling of such procedures.

For buyers, it offers the opportunity to acquire properties at market or even below market value - with full legal protection. With platforms like LocalAuction.ch, this market becomes clear, accessible, and data-driven analyzable for the first time - a win for investors, authorities, and the rule of law alike.

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