From your invoice to the schedule of claims
Once bankruptcy is opened over your business partner, individual debt enforcement against it stops (Art. 206 DEBA). Its assets fall into a single estate (Art. 197 DEBA), administered by the bankruptcy office for all creditors together. Your invoice, however justified, no longer entitles you to payment. It entitles you to participate in the proceeding.
That participation is not automatic. The bankruptcy office publishes a call to creditors (Art. 232 DEBA), and you must file your claim with supporting documents: contract, invoices, delivery records, correspondence. The administration then examines what was filed (Art. 244 DEBA) and draws up the schedule of claims (Art. 247 DEBA).
If your claim is rejected, or a competitor's claim is admitted that you consider unfounded, the schedule can be challenged in court under Art. 250 DEBA within the published deadlines. File diligently and on time. A claim that is not filed properly is, for practical purposes, a claim given up.
Ranking decides who sees money
The estate is distributed in the fixed order of Art. 219 DEBA. Secured creditors are paid first out of the proceeds of their collateral. Certain claims are privileged by law, most notably employee claims and social-insurance contributions. Ordinary unsecured creditors, which is what most suppliers and service providers are, come last.
Be realistic about what that means. By the time an ordinary bankruptcy reaches the unsecured class, the estate is often largely consumed. A dividend of some kind is possible; full recovery is rare. This is worth knowing before the bankruptcy, not after, because it is the reason credit limits, deposits and security exist.
The protections that actually work
Two mechanisms routinely do more for creditors than their rank in the schedule.
The first is retention of title. If you sold goods and validly retained ownership until payment, the goods are not part of the estate and can be reclaimed. Swiss law has a particularity here: under Art. 715 CC a retention of title is only effective if it is entered in the official register at the buyer's domicile, a step that is very often missed. An unregistered clause in your terms and conditions will not survive the bankruptcy.
The second is set-off. If you owe the bankrupt company money as well, for example because it supplied you too, Art. 213 DEBA generally lets you set your claim against your debt, which effectively pays your claim in full up to that amount. There are limits, notably where claims were acquired shortly before bankruptcy to create a set-off position, and payments received in the run-up can be clawed back by the estate under Art. 288 DEBA. In ordinary trading relationships, though, set-off is the single most valuable right a creditor holds.
What to do
Answer the call to creditors on time, with complete documentation. Before filing, check whether goods can be reclaimed and whether set-off applies, and declare both. Review the schedule of claims when it is published, and diarise the challenge deadlines. And for important counterparties going forward, put retention of title, security or prepayment in place while everyone is still solvent. If a partner of yours has entered bankruptcy, we are glad to review your position with you.
This is general information, not legal advice. How it applies to your situation depends on the facts, if in doubt, ask.
