You want to lend money to a person in a private capacity or for the business of a loved one.
A friend, family member or even your husband/wife needs money quickly to alleviate certain financial difficulties or to buy something like a car. He or she is asking you for a private loan or for his business. Loans between individuals or between spouses allow some to bypass banks that would reject their credit request because they do not meet the conditions for obtaining credit in Switzerland, while others want a procedure to simplify and pay less interest only with bank loans.
Good reasons to protect yourself
As a general rule, an oral agreement is made, and too often, since it is a relative, one neglects to take the usual precautions. But what if you have to go to court for repeated and prolonged late payments, or worse, if your debtor breaks his word by refusing to acknowledge the debt? Without an authentic instrument, you run the risk of engaging in long and costly legal proceedings without the guarantee that the outcome will end to your advantage. In the absence of an IOU, how can we prove that it is a loan and not a gift?
If a loan agreed between married spouses has not been formalized by an acknowledgment of debt, it could be interpreted in the event of divorce or death as a gift.
Thanks to a proper acknowledgment of debt, the procedure will be expeditious and nothing will be able to contest your right to reimbursement before a judge.
Articles of law
2 articles of law deal with the acknowledgment of debt:
- Article 82 LP (federal law on debt collection and bankruptcy). It indicates that “the creditor whose prosecution is based on an acknowledgment of debt established by authentic instrument or under private signature may request the temporary release of the opposition”.
- Swiss Code of Obligations Regarding Consumer Loans, p. 220, Chapter II, sections 312 to 318
If the purpose of the loan was to acquire a consumer good (car, furniture, etc.), a simple invoice in your possession will not constitute proof under the law. Contrary to popular belief, an email will also have no legal value in court.
Key points of the document
You must therefore write down the agreement made orally in a loan contract. Take care that the commitment to pay is not conditioned on anything or subject to possible reservations.
Here are the mandatory points that must appear in the acknowledgment of debt:
- Last name first name of debtor and creditor
- Sum of money – written in letters and numbers
Take care that the amount is clearly indicated without the judge having to engage in a scholarly calculation to determine it. Otherwise, the release request may be denied.
- Loan maturity
When you decide to initiate the prosecution requisition, the claim must necessarily be due, and therefore due.
- Handwritten signature
The person must be of full age and in full possession of their capacities (mental or physical faculties). If it is a legal person, check with the commercial register that the signatory officially represents the company. The signature must be handwritten and legible.
- Number of copies: 2
- Purpose of the loan
To be able to claim interest on the amount due, you must specify it black on white. In this case, you will have to take into account that the maximum authorized rate for consumer credit is 10%. Below that, there are no specific rules.
- Repayment Terms
You can detail a schedule with the amounts to be reimbursed monthly.
It is possible to pledge a pledge, mortgage, etc.
- Penalties for late payment
You can agree late penalties for example in the form of interest.
The statutory limitation period is normally 10 years. For the newlyweds, the deadline remains fixed during the marriage period, the counter does not start until the end of the marriage.
If you have any doubts about the drafting or the legal implications of the authentic instrument, we recommend that you seek legal advice.