Debt relief

What is debt relief?

Debt relief is a type of contract between the creditor and the debtor, allowing the latter to be released from his debts. The debtor agrees to waive all or part of the debt owed by the creditor. The agreement is valid as soon as the creditor makes the offer and the debtor accepts it. A debt remission cannot occur if legal provisions do not allow the debtor to waive his claim.

What form should the relief of debt take?

No form is required for the remission of debt if no contract has been drawn up giving rise to the debt. However, it is advisable to establish a written agreement between the parties to avoid possible risks.

How can a debt be forgiven?

Debtors in Switzerland have only two ways out of their debt: Either they pay back their debt in full, or they make an agreement with the creditors so they only have to pay back a part of their debt. There are no regulations, so the creditors are free to accept or refuse any offer of payment.

Residual debt discharge in Switzerland

Unlike many other countries, Switzerland does not have a mechanism of residual debt discharge. Thus, if a Swiss debtor can't get a majority of creditors to agree on the cancellation of the debt, they have poor chances of ever living debt-free again. Changes of legislation are being discussed right now which would introduce a new debt cancellation procedure.