Debt collection agencies: what they can — and cannot — demand
Updated on 5 August 2026
In brief
A debt collection agency acts either as the creditor's agent or as assignee of the claim: it holds no coercive power of its own. It can neither seize your assets nor freeze your account — only the debt enforcement office can, and only after a proceeding. On the amount: statutory default interest is 5% per year (Art. 104 para. 1 OR) unless a rate was agreed, and collection fees are owed only if they were validly agreed. Faced with a payment order, filing an objection is free, must be done within ten days, and needs no reasons (Art. 74 SchKG).
Letters from collection agencies are designed to intimidate: bold type, short deadlines, threats of “immediate measures”. Separating what is legally owed from what is commercial pressure changes your negotiating position entirely.
What power do they actually have?
A collection agency acts either on the creditor's instructions or after having the claim assigned to it. Either way it remains a private actor: it cannot order a seizure, freeze an account, or turn up at your home to take goods away. Those measures belong exclusively to the debt enforcement office, and only after a payment order met with no objection, or an objection set aside by a judge. A letter announcing an “imminent seizure” before any proceeding has begun is therefore describing a stage that does not yet exist.
The fees you can contest
The creditor may claim the amount due and default interest, set by law at 5% per year where no rate was agreed (Art. 104 para. 1 OR). Reminder and collection fees, by contrast, are not automatically owed: they require a valid contractual basis, and any additional loss claimed must be established (Art. 106 OR). A CHF 400 invoice carrying CHF 250 of “administration fees” therefore deserves close scrutiny. Ask in writing for the itemised statement and the contractual provision on which each item rests.
The objection: your most powerful tool
If the agency initiates enforcement, you will receive a payment order. At that point filing an objection immediately suspends the proceeding: it is free, done within ten days of notification, orally or in writing, and you do not have to justify it (Art. 74 SchKG). It is then for the creditor to go to a judge to have your objection set aside. You can also contest only part of the amount, stating precisely up to what sum you object — useful where the debt is genuine but the fees are questionable.
Negotiating, and what paying really changes
An instalment arrangement is often accepted, since partial recovery beats a certificate of loss. Have it confirmed in writing, and expressly cover what happens to the enforcement entry. This matters: paying does not erase the register entry. A paid entry stays visible until the creditor withdraws it or five years after closure (Art. 8a para. 4 SchKG), and the creditor is under no legal obligation to withdraw it. Negotiate the withdrawal at the same time as the payment — that is the moment when you hold the most leverage.
Do I have to pay the collection fees demanded?
Not necessarily. Default interest of 5% is owed by operation of law (Art. 104 para. 1 OR), but collection fees require a valid contractual basis. Ask for the itemised statement and the clause it relies on.
Can a collection agency garnish my wages?
No, not itself. Only the debt enforcement office can order a seizure, and only after a payment order met with no objection or an objection set aside by a judge.
If I pay, does the entry disappear from my extract?
No. Payment closes the proceeding but the entry stays visible until the creditor withdraws it or five years have passed (Art. 8a para. 4 SchKG). Negotiate the withdrawal in writing when you pay.