People who can no longer pay their bills and are facing accumulated debts can turn to the over-indebtedness commission. The nature of the debts must be non-professional.
This allows the procedure against the applicant to be interrupted and to find solutions to restructure the debt and erase it. The over-indebtedness case is examined by a commission that has three months to accept or reject the application. Recourse to the over-indebtedness commission is completely free.
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Discover in the rest of this article who can appeal to the over-indebtedness commission, how to enter it, how long it takes to get a response, and the different solutions that will be implemented.
Over-indebtedness of individuals: legal definition
The concept of over-indebtedness is defined by law according to the Consumer Code, which states: “The situation of over-indebtedness of individuals is characterized by the obvious impossibility for the debtor to honestly respond to all their non-professional debts.”
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In other words, this means that individuals who are unable to pay their debts due to an excessive number of loans or a decrease in income due to a change in circumstances (job loss, illness, etc.) and who have tried to find solutions in advance can appeal to the over-indebtedness commission.
When the committee is seized, it is tasked with finding an amicable agreement between the different parties (creditors and debtors). Its goal is to find solutions to the applicant’s situation, which can range from implementing debt forgiveness to the cancellation of debts. It is completely free.
Each ministry has its over-indebtedness commission. It is located at the Banque de France. Find all the addresses here with their contact details.
Who handles the over-indebtedness file?
To appeal for over-indebtedness with a commission, the applicant must meet several criteria:
- The application must be made by an individual: the debts in question must be of personal or family origin. Those resulting from professional activity are not taken into account. In this case, it is governed by the Commercial Code.
- Facing “serious” financial difficulties: the applicant is no longer able to bear the charges.
- Be of French or foreign nationality but residing in France.
- Be of French nationality but residing abroad, provided that the debts come from creditors based in France.
The notion of “good faith” in the law is essential to the study of your over-indebtedness case. This means that you must not have intentionally organized your insolvency and have taken steps to resolve the situation.
For those wishing to take out a loan but unable to use the traditional banking system, there is the option of using social microcredit. Additionally, assistance for bill payments can be requested. Learn more about TSS for gas and RTN for electricity. In some cities, special water rates are also offered to residents. Check out the list in this article.
In case of financial difficulties, it is also possible to obtain a loan from the CAF to cover certain bills, the purchase of basic furniture, etc.
The over-indebtedness of the Banque de France: how to apply
The application for over-indebtedness is addressed to the commission located at the Banque de France in your department of residence. It is made using the form that you can download directly from this link. It is extensive as it contains 11 pages.
The complete file along with all supporting documents must be submitted to the secretariat of the over-indebtedness committee. You can submit it directly or send it by mail using a letter explaining the purpose of your application.
To assist you in this process, several tools are available:
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- The supporting documents to attach to your over-indebtedness application: the list can be downloaded directly here. It consists of 5 pages.
- An explanatory note: it provides information on how to fill out your over-indebtedness file. Find it on this page. A letter template is also available.
- You can also call upon your social worker who can help you create your over-indebtedness file.
file
For couples, you can submit a file personally or jointly. However, in this case, it is preferable to apply in the name of the couple.
If you have previously benefited from a recovery plan from the Commission, attach a photocopy to your new application.
The commission responsible for ruling on your over-indebtedness application consists of a total of 7 members: the prefect or their representative presiding over the meeting, a representative of public finances, 2 people representing credit institutions and consumers, a specialist in SFS (social economy and family economy), and a lawyer. The secretary is the director of the local Banque de France.
Over-indebtedness: what to do while waiting for your file to be reviewed?
Within 48 hours of submitting your application, you will receive a certificate by mail or email. While waiting for the Commission’s response, you should continue to pay your bills as much as possible.
During the processing time of your file, you must:
- Not increase your debts.
- Not use your credit card.
- Not take out new loans.
- Continue efforts to resolve your situation.
Additionally, be aware that you are registered in the National Personal Credit Repayment Incident File (FICP) for a period of 5 years from the submission of your over-indebtedness case. It is accessible at any time by banking institutions.
Decision of the Over-indebtedness Commission
It may take several months to review your over-indebtedness file. The commission has three months to issue its opinion.
The commission takes stock of the situation with the various elements of the file. If necessary, it can directly contact public bodies or banks to develop the file.
If the personal over-indebtedness commission gives a favorable opinion, your application is deemed “admissible.” You will then be informed, as will the banks and your creditors. Otherwise, it will state “inadmissible.”
Upon favorable opinion and during the entire over-indebtedness procedure within a period of 2 years, you must:
- Not repay your credit or overdraft (discover the fees and solutions to avoid a bank overdraft).
- Not settle your unpaid debts (rent, taxes, various bills, etc.).
During the procedure, only debts of a food or criminal origin can be seized. In return, you are subject to obligations:
- Continue to pay future bills (rent, taxes, etc.).
- Establish child support and possible fines.
Depending on the initial situation of the applicant, the Council assesses possible solutions:
- Amicable agreement between the parties: if the situation allows, the commission will attempt to find an agreement between the over-indebted person and the creditors through a debt restructuring plan that consists of rescheduling debts, postponing, reducing interest rates, and partial cancellation. In the absence of an agreement, the commission can impose certain measures on creditors that must be validated by a judge.
- Excessive financial difficulties: If the commission believes that you are unable to assume a debt restructuring plan, it may request a liquidation of assets (except those necessary for daily life) to settle the debts. You must give your consent. If no assets can be sold, the judge may order the cancellation of debts.
In any case, the commission will find the solution best suited to your situation. However, it cannot in any case lend money, buy back credits, or consolidate them.
Note: Over-indebtedness and creditors can appeal the decision of the over-indebtedness commission within 15 days by registered letter with acknowledgment of receipt to the secretariat of the Commission. The file will then be transferred to a judge.
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