The debtor is not paying. What does the Code of Obligations provide, when does default start, what consequences arise — and when is collection worthwhile, when the step to debt enforcement?
Art. 102 et seq. CO governs debtor default. Default begins in principle with a reminder — or without a reminder if a specific date was agreed (transaction with a fixed date, Art. 102 para. 2 CO). This is a good example of a contractual clause often missing from templates that makes the difference in a dispute.
Requirements for default
Three requirements must be met: the claim is due, the debtor has been reminded (or it is a fixed-date transaction), and there are no defences (deferral, notice of defects, set-off). If even one is doubtful, debt enforcement is premature and ends in an objection with an unclear outcome.
Consequences of default
First, default interest: 5% on monetary claims absent other agreement (Art. 104 CO), higher interest if contractually agreed. Second, damages for default loss under Art. 103 CO. Third, in bilateral contracts, the creditor's right of choice under Art. 107 CO — performance with default consequences, waiver plus damages, or rescission.
When a reminder, when not?
In fixed-date transactions (delivery by 30.06., instalment due on the 15th of each month, rent at month start), default begins automatically. In all other contract types, the creditor must first send a reminder. The reminder must clearly designate what is demanded; a mere reference to an unpaid invoice is not always sufficient.
Collection vs. debt enforcement — which strategy?
Extrajudicial collection (third reminder with clear consequence, collection letter from a third-party company or a lawyer) resolves about 60-70% of cases without escalation. Advantage: faster, cheaper, no entry in the debtor's debt-collection register.
If no reaction: debt enforcement. The payment order is served on the debtor, who can lodge an objection within 10 days (Art. 74 DEBA). If they do, debt enforcement stops — the creditor must initiate the dismissal of the objection or a civil claim.
International claims
If the debtor is located abroad: Swiss debt enforcement is territorial. Enforcement in the EU area runs via the Brussels Ia Regulation — Swiss judgments are recognised, Swiss debt enforcement titles are not. In this constellation, a direct civil claim in the debtor's state of residence or in the contractually agreed forum is often worthwhile.