Getting into debt is easy, but paying it all off – not so much. What you should know about the risks of getting indebted in Switzerland – and how to get out it.
Official statistics show that over 41 percent of Switzerland’s residents carry some kind of debt – a mortgage, a car loan, or credit card balances.
That is ok – as long as you are paying them off regularly.
Problems arise if you start accumulating arrears – and about 5.5 percent of Switzerland’s adult population find themselves in this predicament.
There could be many reasons why this is so.
According to Debt Counseling Switzerland, in 56 percent of all cases, the trigger is usually an unforeseen but significant event such as illness, accident, separation or divorce.
Often, too, unreasonable spending habits – buying more than one can afford – are at fault.
And at times, retailers themselves set up conditions for consumers to fall into the debt trap.
One such example are deferred payments.
‘Buy now, pay later’
The staggered payments practice – where you can buy products without having to pay the full amount immediately – is becoming increasingly common on online shopping sites.
At fist glance, this system seems very appealing.
However, if you read the fine print (which many people unfortunately don’t), you will see that additional fees may apply to deferred payments, as well as interest charges for late payments.
And when several deferred purchases accumulate, you risk quickly spiralling into debt.
That is why legislators are now stepping in.
Political action
Two parliamentary motions, submitted at the end of August, are calling on the Federal Council to analyse the risks of over-indebtedness associated with the deferred payments and to propose preventative measures.
The motion also points out that this system operates in a legal ‘gray area’ and is not always subject to the Federal Law on Consumer Credit, which stipulates a limit of 500 francs per loan.
According to deputy Raphaël Mahaim, who is also president of Debt Counseling Switzerland, the deferred payment system “must not become a back door to uncontrolled debt.”
What to do if you fall into the trap
No matter how attractive these (and other) offers sound, think twice (or more) before taking advantage of them.
Even these days, the old adage, “Don’t buy it if you can’t afford it” still holds true.
So what can you do if you are already in debt and not able to pay your arrears?
This is where the government can help you.
In 2025, the Federal Council proposed two new “debt restructuring procedures.”
The first one will enable indebted people with a regular income to to enter into an agreement with creditors providing for the partial remission of the debt — if the majority of creditors approve it and a judge considers it appropriate.
For those in debt who have no chance of reaching an agreement with their creditors, the Federal Council is proposing a debt restructuring procedure through bankruptcy.
The debtor will have to hand over all the funds at their disposal to their creditors over a period of several years, “and prove that efforts are made to earn a regular income,” the government said.
The Federal Council has reduced the duration of this collection phase from four to three years. “The debtor who has respected his commitments throughout the procedure will benefit from a release of the balance of his debts,” it said.
READ MORE: How foreigners in Switzerland can get help if they are in debt
This link has contact information for debt counselling service in all linguistic regions.
