Three ways out of over-indebtedness

Posted on January 17, 2017 by Marion

Three ways out of over-indebtedness

The level of French household debt fell last year thanks to the state's supervision measures.

There are always households that are victims of over-indebtedness or are in the process of sinking into it with hard or even complicated ends of the month. There are effective and difficult solutions in procedure.

Buyout and renegotiation: the most effective

The first solution, and by far the most realistic and the most effective, is debt redemption . With this formula, the borrower who is unable to meet the monthly payments, has a new loan.

The repurchase in fact depends on the economic situation and is only possible when the current interest rate is lower than the rate of the initial loan. The borrower will have a loan, reduced monthly payments and spread over a longer period.

Corporate debts, social charges and VAT are not eligible for redemption and you must not be filed with the Bank of United States.

The second solution is in the same ilk. If the borrower has only one debt, he can resort to an operation called renegotiation of the current credit. He is negotiating a new loan with his bank with the current conditions.

Referral to the over-indebtedness commission

Another solution: use the over-indebtedness commission. Thanks to the mediation of the commission, the over-indebted hopes for the renegotiation of his debt with his creditors.

It will have a new schedule, a lowered amount or just a total write-off which is normally decided for domestic debts.

Professional debts not related to personal bankruptcy are not eligible. This is also the case for unpaid alimony and debts due to the Public Treasury linked to a decision of the Court.

In the case of an intervention of the debt commission, one must expect the sale of goods within the framework of a judicial liquidation.

The final word rests with the judge regarding the resolution of an over-indebtedness.

Request the assistance of an association

To successfully resort to the over-indebtedness commission, the borrower can be helped by an approved association and used to this kind of financial difficulty. This is the case with Croesus and Cypress.

Rental debts are the big plague. The owner and the tenant are called upon to negotiate a discharge plan before any eviction procedure. In this eventuality, CAF must intervene, which pays the APL.

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