Getting out of over-indebtedness: what actually works
Updated on 5 August 2026
In brief
There is no automatic discharge of debts in Switzerland. Personal bankruptcy (Art. 191 SchKG) closes ongoing proceedings but does not extinguish them: creditors receive certificates of loss, and the claim survives for twenty years without interest (Art. 149a SchKG). The genuinely effective routes are negotiated restructuring — with help from a debt counselling service, often free — and the amicable debt settlement provided for in Art. 333 ff. SchKG, which allows proceedings to be suspended while an agreement is built with all creditors.
Many over-indebted people expect personal bankruptcy to offer a fresh start, as it does in other countries. Swiss law works differently, and not knowing that costs years. Here are the real options, in the order in which it makes sense to consider them.
Start with a debt counselling service
Specialist services exist in every region — debt counselling associations, communal social services, Caritas advice centres — and their services are free or charged at a social rate. Their role is to establish a full picture of your debts, draw up a realistic budget, determine your actual repayment capacity and negotiate with creditors on your behalf. This is almost always the sensible first step: a structured file radically changes how creditors receive a proposal.
Negotiated restructuring
On the basis of an established budget, the aim is to offer creditors either a staged payment plan or a partial settlement — a percentage of the claim paid in one go against waiver of the balance. Institutional creditors accept more often than people expect: a certain dividend beats a certificate of loss. Negotiate every agreement in writing, and always include what happens to the enforcement entry: obtaining the withdrawal of paid entries at the same time (Art. 8a para. 3 let. c SchKG) is what will give you a clean extract.
Amicable debt settlement
Art. 333 ff. SchKG provide for a court procedure open to debtors not subject to bankruptcy proceedings. The judge can grant a moratorium of a few months, during which proceedings are suspended, and appoint a commissioner to negotiate an agreement with all creditors. It is a useful tool where bilateral negotiations fail because a single creditor blocks everything. The procedure requires a solid file and, in practice, support from a specialist service.
Personal bankruptcy: what it does and does not do
A debtor may declare insolvency (Art. 191 SchKG). Bankruptcy then realises their seizable assets and closes ongoing proceedings — which brings genuine breathing room. But it does not extinguish the debts: for the uncovered portion, each creditor receives a certificate of loss, enforceable for twenty years and bearing no interest (Art. 149a SchKG). The creditor can only resume enforcement if you return to better fortune. Bankruptcy also leaves a heavy trace on your extract and with credit-scoring agencies. To be considered only after examining the negotiated routes.
Does personal bankruptcy wipe out my debts?
No. It closes ongoing proceedings, but creditors receive certificates of loss and the debt survives for twenty years, without interest (Art. 149a SchKG). Swiss law has no automatic discharge.
Does debt counselling cost anything?
Services run by associations and social services are free or charged at a social rate. Be wary, however, of commercial “debt buy-out” offers charging high fees up front.
Can a creditor refuse a payment plan?
Yes, no creditor is obliged to accept. That is precisely where amicable debt settlement (Art. 333 ff. SchKG), which brings all creditors together under a judge, becomes useful.