No longer being able to honor your debts, repay your mortgages or consumer loans is a difficult situation and unfortunately not uncommon. Nearly 163,000 households were in this case in 2018 according to figures published by the Banque de France. Over-indebtedness mainly concerns people who live alone, single-parent families and those who live below the poverty line. Faced with such a situation, there are solutions to get help and get out of financial difficulties.
Over-indebtedness is precisely defined by Articles L. 711-1 and L. 712-2 of the Consumer Code:"the situation of over-indebtedness is characterized by the manifest impossibility of meeting all of one's debts due and falling due .
In concrete terms, a person is considered to be in a situation of over-indebtedness when they no longer have the possibility of repaying their non-professional debts such as their rent, their water and electricity bills, etc., their monthly mortgage payments or consumption, or its taxes. These debts are the ones you haven't paid, the ones you need to pay, and the upcoming ones you won't be able to honor.
The debts not taken into account to qualify a situation of over-indebtedness are those directly or indirectly linked to a professional activity, which concern alimony, damages and interest awarded to victims in the context of a criminal conviction and criminal fines.
The person concerned by the over-indebtedness must demonstrate his good faith and justify not being able to repay his debts to claim to be helped in the resolution of his situation.
It is important to react quickly when experiencing financial difficulties. At first, it is a question of trying by yourself to balance your budget, and above all to avoid aggravating your over-indebtedness.
To be helped in this process, a certain number of interlocutors exist who can support you. Thus, the municipal center for social action (CCAS) in your municipality, the social services of the departmental council or even family support or consumer protection associations, provide professionals whose mission is to help you in managing your budget or informing you about the various social aids (family benefits, housing aid, etc.) that could help you to balance your budget and deal with your debts.
In the same way, and if your financial difficulties are only temporary, you can also contact your bank and meet an advisor who will study your over-indebtedness situation to try to find solutions with you.
In the event of significant debts but due to exceptional and temporary circumstances, you also have the possibility of asking the judge of the district court of your domicile to benefit from payment deadlines.
In order to help people in a situation of over-indebtedness, France has set up a free procedure open to individuals which allows them to file a file with an over-indebtedness commission whose objective is to seek the most suitable solution for your financial situation. Please note:this commission is not intended to pay debts for you, nor to lend you money.
To contact the over-indebtedness commission, you must go through the Banque de France services in your department. You will be given a file to complete (also available online) and to submit to the over-indebtedness commission of your department (located on the premises of the Banque de France), accompanied by certain supporting documents, including documents attesting to your identity. , your resources, your expenses, your debts and your assets. You can get help from a social worker from a CCAS, the CAF or your town hall to compile this over-indebtedness file.
If you file a file with the debt commission, neither your bank nor the people or organizations to whom you owe money are informed of your approach. They are only from the moment the commission deems your file admissible to be processed. On the other hand, you are automatically registered in the National File of Personal Credit Repayment Incidents (FICP), and for a maximum of 7 years if your file is processed by the Over-indebtedness Commission.
Once your over-indebtedness file has been accepted by the commission, several procedures are put in place:
Throughout the period of study of your file by the over-indebtedness commission, you must undertake not to worsen your situation by taking out new loans, for example, not to sell your assets, not to repay your loans and not to not settle your debts late. On the other hand, you must continue to pay your rent, tax, insurance, telephone bills, etc., current or future.
The over-indebtedness commission puts in place, if your financial situation allows it, a measure to reimburse your debt in the form of rescheduling, deferral or partial cancellation of your debts. If you own your home, the commission establishes a repayment plan in agreement with you and your creditors. This plan, called "conventional recovery plan", may provide for the full payment of your debts, to reduce the amount of your repayments, to reduce the interest rate of your loans or to sell your property.
