National Council committee says yes to second chance for people in debt

The bill introduces a restructuring bankruptcy procedure for people who are hopelessly in debt. The National Council's Legal Affairs Committee (RK-N) approved the amendment to the law by 16 votes to 9, as reported by the Parliamentary Services on Friday. The National Council is expected to decide on this in September.

The RK-N backed away from its intention to increase the duration of the debt collection procedure from three years - as proposed by the Federal Council - to five years. During this period, the indebted person must hand over all available funds to the creditors and prove that they are trying to earn a regular income.

If they meet their obligations during this three-year period, they generally do not have to pay the remaining outstanding debts. However, the RK-N wants a regulation that allows an extension to four years in certain cases. This compromise was adopted by 13 votes to 11.

However, there are minority motions on this: One minority is calling for a skimming period of three years, as proposed by the Federal Council. A second insisted on an extension to five years. A further minority calls for the restructuring bankruptcy procedure not to be introduced at all.

According to the Federal Council, Swiss law currently makes no provision for destitute, highly indebted people to restructure their finances in the long term. These are people for whom a debt restructuring agreement cannot succeed.

The bill also contains a simplified debt restructuring procedure aimed at debtors with a regular income. It is intended to enable partial debt relief or a longer deferral of debts.

At the presentation of the proposal, the responsible Federal Councillor Beat Jans told the media that, according to estimates, around two to ten thousand people in Switzerland could make use of the new procedure each year.