Pledge realization

Pledge realization concerns the conversion of collateral into money when the secured debt is not paid. In Swiss practice it may occur within enforcement against pledged property, bankruptcy, or under valid contractual mechanisms where allowed. The process must respect the pledgor’s rights, priority of secured claims and any third-party interests. Proceeds are applied first according to the security right and costs, with any surplus returned or distributed as appropriate. The concept covers both movable collateral and other pledged rights, subject to specific rules.