How to make an over-indebtedness file?
Filing an over-indebtedness file with the Bank of France allows legal protection against its creditors. It is a solution to enjoy a new beginning, but reserved for “irreparably compromised” situations.
The debt overhang is the last hope of debt-ridden people.
- Download and complete the over-indebtedness file
- What is the Debt Commission?
- Who can make an over-indebtedness file?
- Where to find an over-indebtedness commission?
- Consequences of filing an over-indebtedness file
- Steps in an over-indebtedness file
- File inadmissible at the Bank of France
- Dossier admissible to the Bank of France
In 2016, even though the number of over-indebtedness files filed has dropped (10% less than in 2015), the figures are still much too hard: it is almost 200,000 files filed in 2016 alone! In 2008, 188,485 files were filed with the secretariats of the commissions, compared to the 194,194 files of 2016. As a reminder, there are two types of over-indebtedness:
- Over-indebtedness “passive”: caused by a loss of income, often due to an accident of life (illness, unemployment, divorce). These are ¾ of the files deposited at the Bank of France.
- “Active” over-indebtedness: there was no loss of income, but the over-indebted one contracted too many credits.
More than ever the over-indebtedness and the solutions to leave it are of topicality. Filing an over -indebtedness file with the Bank of France can be an early solution, but is it really for you? To find out, follow our guide.
- Find an over-indebtedness commission
There are many pages to complete, to take stock of your financial situation. Do not forget that you can call them at the national number for help where to know the terms of the deposit!
To help you fill out your declaration of overindebtedness, you can download directly on the site of the Government the explanations, with the explanatory note.
All stages of the debt overhang are explained in great detail.
Once the file is filed, you will obtain your certificate of deposit of debt overhang. From that moment, the commission will study the admissibility or not of your file. Basically, if you are in the criteria for you to be made a folder of over-indebtedness. All decisions of the commission are notified by mail to the parties, debtors and creditors.
Declaration of overindebtedness
It should also be known that persons who exercise an independent activity can not seize the Commission of over-indebtedness, there are other procedures for them (collective procedure law of 1985). This is the case of farmers, liberal professions, craftsmen, traders. This type of job here lives an unfair situation, I think: they take risks wanting to be independent, but do not enjoy this protection.
Art. L. 330-1. – The situation of overindebtedness of natural persons is characterized by the manifest impossibility for the debtor in good faith to face all of his non-professional debts due and to fall as well as to the commitment that he gave of to guarantee or jointly pay the debt of an individual entrepreneur or a company if he has not been, in law or in fact, manager of that company.
If you are French but live abroad, you must have made your non-professional loans exclusively in France. The commission of over-indebtedness will be able nothing for your credits obtained abroad!
The commission will also check:
- that you are in good faith
- that you are well in “the manifest inability to face your debts”
- that your debt is not of professional origin
90% of the files since the creation of the Commissions of over-indebtedness are receivable. First consequence: you receive a certificate of deposit of file within 48 hours. This is the certificate of filing of debt overhang, which will allow you immediate relief from creditors, who will no longer be able to appeal to bailiffs to seize you. It is also a proof of your good faith and your desire to get you out of this infernal spiral of overindebtedness. It is very important to send the certificate to all your creditors, to block the ushers to whom they would have resorted.
After filing the file, you will be registered with the FICP, the file of Incidents of refunds of Credits to Individuals. It is a file that can be viewed by all credit institutions. It is, in a way, a credit ban. No other organization will want to lend you money from that moment on.
This record is 7 years maximum. You are now banned from credit. As a logical consequence, you agree not to make new loans or to use cash and other credit cards in case the credit institution does not take into account your registration at the Bank of France ( which is very rare!). The simple filing of the file does not yet protect you from legal proceedings against you by the persons to whom you owe money.
It is important not to favor one creditor for the benefit of another: if for example you sell your car, the money collected will be used to repay a little of each debt. You must try not to interrupt your repayments, even if you only have to pay back part of it, for example 20 euros per month instead of 90. The file deposit does not mean that you can now stop paying!
Debt write-off: civil bankruptcy and personal recovery procedure
Treatment by the over-indebtedness commission: the conventional recovery plan
The commission that agrees to deal with your over-indebtedness file will try to negotiate with your creditors a renegotiation of your debt, amicably. It tries to establish a conventional plan of amicable recovery between you, the indebted one, and the people to whom you owe money. If everyone agrees, the conventional plan of recovery is validated in session by the signature of the chairman of the commission of over-indebtedness, transmitted to the parts and put into application.
The recovery plan provides for the adjustment of debts (spread over time, postponement of maturities, reduction of interest rates, etc.) and the amount that must remain to live after the repayment, which can not be lower than the RSA.
If no solution has been found, because for example the creditors or the debtor refuse the solutions proposed by the Commission of over-indebtedness, the commission draws up a report of failure. If the overindebted wishes, he can make the request within a certain time, the opening of “recommendations”. These recommendations are binding upon the parties after the judge has made them enforceable: from there, it is a court decision that is binding on creditors and debtors.
Treatment by the judge of execution: the moratorium of over-indebtedness
If the debtor is much too indebted so that the commission can establish a conventional plan of recovery, the Law of July 29, 1998, allows him to propose to the Judge of the Execution the suspension of the exigibility of the claims other than food or fiscal for two years. To take advantage of this moratorium on over-indebtedness, there must be a reasonable chance of improving the personal situation (finding a job, being increased).
Debts are paused for a maximum of two years. It’s time for the over-indebted to “get healthy again”, and recover the ability to repay.
During the moratorium, creditors can no longer harass or ask to be reimbursed. The payment of interest is also suspended. After the moratorium, depending on the personal situation, three possibilities:
- The situation has evolved favorably, it is now possible to repay all debts: the repayment will be made normally with creditors.
- If it is possible to avoid judicial liquidation: the judge will refer the person to a conventional recovery plan.
- Nothing has changed, it is still impossible for the over-indebted to repay: the enforcement judge can partially clear the debts, establish a procedure for personal recovery.
Such difficulties must originate in a case of major force related to a significant loss of income (accident, unemployment). This procedure only concerns:
- Consumer credits
- Real estate loans
Pursuant to Law L313-12 of the Consumer Code, the borrower can request a reduction or suspension of maturities to be settled for a period of 2 years, and / or an exemption from paying the corresponding interest.
If the situation is irretrievably compromised, and you will not be able to repay your debt even in two years, it is a personal recovery procedure that will be put in place.