Debt Settlement Agreement for Switzerland

Debt Settlement Agreement Template for Switzerland

A Debt Settlement Agreement under Swiss law is a legally binding document that formalizes an arrangement between a creditor and debtor to resolve an outstanding debt obligation. Governed by the Swiss Code of Obligations and relevant federal acts, this agreement typically provides for the settlement of debt through a lump sum payment or structured payment plan, often at a discount from the original amount owed. The document includes detailed terms for payment, releases, and consequences of default, while ensuring compliance with Swiss debt enforcement and bankruptcy regulations.

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What is a Debt Settlement Agreement?

The Debt Settlement Agreement is a crucial document used when parties wish to formally resolve outstanding debt obligations under Swiss law. It is particularly relevant when a debtor cannot meet the original debt terms and the creditor is willing to accept modified payment arrangements or a reduced sum in full settlement. This document, governed by Swiss federal legislation including the Code of Obligations and the Federal Act on Debt Enforcement and Bankruptcy, outlines the original debt, agreed settlement amount, payment terms, and mutual obligations. It provides legal certainty for both parties and can help avoid costly litigation or formal debt enforcement proceedings. The agreement is commonly used in both business-to-business and business-to-consumer contexts, offering a structured approach to debt resolution while ensuring compliance with Swiss legal requirements.

What sections should be included in a Debt Settlement Agreement?

1. Parties: Identification of the creditor and debtor, including full legal names, addresses, and any registration numbers

2. Background: Description of the circumstances leading to the debt and this settlement agreement

3. Definitions: Key terms used throughout the agreement

4. Acknowledgment of Debt: Formal acknowledgment of the original debt amount and its validity

5. Settlement Terms: Details of the agreed settlement amount and any discount from the original debt

6. Payment Terms: Payment schedule, method of payment, and consequences of default

7. Release and Discharge: Terms of release from the original debt upon completion of settlement payments

8. Representations and Warranties: Statements of fact and promises by both parties regarding their capacity and authority

9. Confidentiality: Obligations regarding the confidentiality of the settlement terms

10. Governing Law and Jurisdiction: Specification of Swiss law as governing law and jurisdiction for disputes

11. Entire Agreement: Confirmation that this document represents the complete agreement between parties

12. Execution: Signature blocks and execution requirements

What sections are optional to include in a Debt Settlement Agreement?

1. Third-Party Rights: Required when there are guarantors or other third parties involved in the debt

2. Tax Implications: Include when there are significant tax consequences of the debt settlement that need to be addressed

3. Installment Default Provisions: Include when payment is to be made in installments, specifying consequences of default

4. Credit Reporting: Include when parties need to agree on how the settlement will be reported to credit agencies

5. Security Provisions: Required when the settlement is secured by assets or guarantees

6. Force Majeure: Include when long-term payment arrangements might be affected by unforeseen circumstances

7. Assignment Rights: Include when either party needs the right to assign the agreement to other parties

What schedules should be included in a Debt Settlement Agreement?

1. Schedule A - Debt Statement: Detailed breakdown of the original debt, including principal, interest, and any fees

2. Schedule B - Payment Schedule: Detailed payment plan including dates, amounts, and payment methods

3. Schedule C - Supporting Documents: Copies of original debt documentation, invoices, or contracts

4. Schedule D - Release Form: Template of the final release document to be issued upon completion of payments

5. Appendix 1 - Calculation of Settlement Amount: Detailed calculation showing how the settlement amount was determined

6. Appendix 2 - Bank Details: Payment instructions and bank account details for settlement payments

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant Industries

Banking & Financial Services

Insurance

Real Estate

Manufacturing

Retail

Professional Services

Construction

Healthcare

Technology

Telecommunications

Energy

Consumer Goods

Relevant Teams

Legal

Finance

Treasury

Credit Control

Collections

Accounts Receivable

Risk Management

Compliance

Corporate Secretariat

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Credit Controller

Collections Manager

Accounts Receivable Manager

Legal Counsel

Corporate Lawyer

Debt Recovery Specialist

Treasury Manager

Risk Manager

Financial Controller

Compliance Officer

Business Development Manager

Contract Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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