Certificate of unpaid debt (Verlustschein)

What is a certificate of unpaid debt?

A certificate of unpaid debt (in German: Verlustschein) is an official document from debt enforcement proceedings. The debt enforcement office issues it when a creditor does not receive their claim, or only receives part of it, because the debtor has nothing or too little that can be seized. The certificate records how much has remained uncovered. The debt does not disappear as a result; it is merely converted into a different form.

In health insurance, the certificate of unpaid debt plays a special role. If you do not pay premiums or co-payments for basic health insurance, the health insurer must initiate debt enforcement against you. If debt enforcement ends with a certificate of unpaid debt, your canton of residence covers a large part of the loss. In this way, the law ensures that the health insurer is not left with the whole amount, and that you remain covered by basic health insurance despite your debts.

There are two types: the certificate of loss after seizure, following an unsuccessful seizure, and the certificate of loss after bankruptcy, following bankruptcy. For private individuals with premium debts, it is almost always the certificate of loss after seizure.

How it works

The route to a certificate of unpaid debt for premium debts is precisely prescribed in the KVG:

1. Reminder. The health insurer sends at least one written reminder.
2. Demand for payment. It then sends a demand for payment with an additional period of 30 days and points out the consequences.
3. Debt enforcement. If you do not pay, the health insurer must initiate debt enforcement. Per calendar year, it may initiate debt enforcement against you no more than twice each for your own arrears and for a child’s arrears.
4. Seizure and certificate of unpaid debt. If the debt enforcement office does not find enough income or assets that can be seized, it issues a certificate of unpaid debt for the uncovered amount.
5. Notification to the canton. The health insurer notifies the canton of the claims that have led to certificates of unpaid debt, confirmed by an auditor. The canton pays it 85 % of them.

The health insurer keeps the certificate of unpaid debt until you have paid everything. If you later pay in full or in part, it passes 50 % of the amount received back to the canton. If the canton takes over the claims for an additional 5 %, the health insurer assigns them to the canton; you then owe the canton and may switch health insurer again.

The certificate of unpaid debt itself is governed by debt enforcement law: it acts as an acknowledgement of debt, the claim no longer bears interest and it becomes time-barred 20 years after it is issued. Within six months of delivery, the creditor can continue debt enforcement without a new payment order.

In addition, your canton can put you on a list of insured persons in arrears. The health insurer then defers payment of all costs except emergencies until the arrears have been paid. Not all cantons keep such a list.

Legal basis

Art. 64a of the Federal Health Insurance Act (KVG) governs non-payment of premiums and co-payments. Para. 1 requires a reminder, a demand for payment and an additional period of 30 days, para. 2 debt enforcement with no more than two debt enforcement proceedings each per year. Para. 3 governs notification to the canton, para. 4 the canton’s payment of 85 % and the repayment of 50 % of later payments. Para. 5 allows assignment in return for an additional 5 %, para. 6 prohibits switching health insurer while there are arrears. Para. 7 allows the list of insured persons in arrears with a suspension of benefits except for emergencies, and para. 7bis allows young adults to switch at the end of the year despite arrears from the time when they were minors.

The certificate of unpaid debt itself is governed by Art. 149 of the Federal Act on Debt Enforcement and Bankruptcy (DEBA) (issue, effect as an acknowledgement of debt, no interest, continuation within six months) and Art. 149a DEBA (time limit of 20 years, payment at the debt enforcement office, deletion). The certificate of loss after bankruptcy is governed by Art. 265 DEBA.

Example: premium debts and their consequences

Daniel, 31, cannot pay nine monthly premiums while he is unemployed. The premium of CHF 400 per month is assumed; the percentages come from Art. 64a KVG.

What this means for you

• Respond to the first reminder. Ask your health insurer about paying in instalments before debt enforcement begins.
• Check premium subsidies. If you are entitled to a subsidy, the premium you have to pay yourself falls. You can find your canton’s rules under Premium subsidies.
• Lower your premium for the future. A cheaper model or a different deductible can lower the premium; the law only allows you to switch health insurer once the arrears have been settled. The premium calculator shows the offers, and the insurers are listed under Health insurers.
• Pay off certificates of unpaid debt in a targeted way. Once paid, the entry is deleted and you can switch again.

High debts are often part of a difficult situation. Cantonal debt advice services and your municipality’s social services can help.

Common mistakes

• Thinking a certificate of unpaid debt cancels the debt. The claim remains for 20 years.
• Ignoring reminders. Each stage can add fees, default interest and debt enforcement costs.
• Wanting to switch health insurer without paying. If there are outstanding arrears, the law blocks a switch of basic health insurance.
• Forgetting the canton. If the canton has taken over the claim, you pay the canton instead of the health insurer.

We explain how we handle figures and sources under How we calculate.