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Debt Collection– Part 3: How to Remove an Objection

It is particularly important for start-ups to receive their remuneration on time. Unfortunately, it is not always the case. If payment reminders do not help and negotiations fail, the last resort is a debt collection procedure. If needed, an outstanding debt is caused to be paid under duress. In a series of four articles, STARTUPS.CH explains what the debt collection procedure is about and how to proceed with it. In the first article it was explained what exactly the debt collection procedure is and how it can be launched. The second article revealed what the default summons and objection are. This third article describes three ways how an objection can be removed.

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To remove an objection, you have to prove that a debt really exists. Depending on what evidence is available to the creditor, an objection can be removed in a different way so that the debt collection procedure could be accelerated. In each case it should be applied for by filing an appropriate petition with the court having jurisdiction over the place where the debt collection procedure has been launched (Article 84 of the Debt Collection and Bankruptcy Act).

Removal by Seeking a Permanent Court Order (Article 80 of the Debt Collection and Bankruptcy Act)

If an enforceable court order is already available to the creditor, he or she may use it to directly demand that the objection be removed. A court settlement deal or promissory letter, an enforceable deed under articles 347-352 of the Civil Procedure Code or a decision issued by a Swiss administrative authority are as valid as a court order.

Removal by Seeking a Temporary Court Order (Article 82 f of the Debt Collection and Bankruptcy Act)

If a deed or a signed promissory letter on which the claim is based is available to the creditor, he or she may apply for a temporary court order. It is approved by the judge if the debtor does not make any submissions that would be credible enough to invalidate the promissory letter. If the debtor fails to apply within 20 days to the court with jurisdiction over the place where the debt collection procedure has been launched for the annulment of the claim or such a petition is dismissed, the temporary court order becomes permanent. For start-ups, it is most often the case. Pursuant to article 82 f of the Debt Collection and Bankruptcy Act, a mutually signed contract for provision of services or purchase order constitutes a promissory letter.

Removal by Launching a Litigation or Administrative Procedure (Article 79)

If none of the above possibilities is available to the creditor, he or she has first to assert his or her claim in a civil litigation, or by launching an administrative procedure. The removal of the objection has to be expressly demanded and approved under such proceedings. This approach is most time-consuming and expensive. It pays for start-ups, therefore, to make sure that contracts they sign are equated with signed promissory letters.

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