How to get out of over-indebtedness?
In a situation of over-indebtedness? You do not know how to get out? This is not inevitable. Discover the steps to follow here
How to get out of over-indebtedness?
Over-indebtedness is a cause of precariousness and real trauma for all concerned. But, far from being a fatality, the over-indebtedness can be treated and its spiral broken with the repurchase of credit or the recourse to the commission of the over-indebtedness. How do these mechanisms help to get out of over-indebtedness? Here are some answers.
Use credit redemption
The purchase of credit allows an individual to resell to a financial institution all or part of its credits (consumer credit or real estate). This operation allows the individual to have a single rate, to reduce his monthly payments while extending the total repayment period of his loan.
Using credit restructuring to get out of debt, requires organization and rigor to comply with the repayment plan . This deleveraging mechanism allows:
- to avoid the registration in the file of the incidences of refund (FICP) which prohibits the person stuck any new credit (personal loan or affected)
- to lower your debt ratio
- stay in control of your budget while keeping credit channels and other remedies open.
However, it must be borne in mind that the repurchase of credit is synonymous with higher cost of pooled credits. To avoid increasing debt, this mechanism should be used with caution.
Good to have : these contracts often contain guarantees like direct deduction from wages.
Tips : It is better to use credit redemption early in the debt. As a matter of priority, contact your bank if conditions permit.
File an over-indebtedness file at the Banque de France
About 75% of the claims filed with the commission of the over-indebtedness are as a result of an accident of life. The over-indebtedness is often suffered and when it becomes uncontrollable (inability to pay the charges and the personal credits) one can address a request to an antenna of the Bank of France in his department of residence . It is “the” ultimate recourse for getting out of debt.
In the event that your file is accepted, the reminders and other penalties are suspended until the establishment of a recovery plan.
To establish the recovery plan, the over-indebtedness commission will evaluate the state of your debt and inform you and your creditor.
In case of disagreement on the diagnosis, you have a period of 20 days to request the referral to the enforcement judge to verify these claims. The recovery plan is negotiated amicably. It may include debt relief, rate reduction, rescheduling of debt payments, closing of savings products, etc.
The plan does not exceed 8 years and it releases a remainder to live superior or equal to 500 €. The creditor may challenge it within 30 days after which it automatically comes into force. The proposed measures allow the applicant:
- to protect yourself from creditors (legal proceedings …)
- to reduce its debt.
Good to know : the rest to live is estimated each year according to a scale and is increased from 50% to 750 € for a dependent. Beyond two people, the allowance is more than 200 € per additional person.
Advice : call on a consumer association, a social worker or a CAF advisor to help you in your approach.
If conciliation fails, how to get out of debt?
If there is no agreement on the recovery plan, you can ask the debt commission for further relief within 15 days . These are essentially measures of erasure, rescheduling, freezing and / or remission of debt over an 8-year period. Its measures exclude food debts, tax debts and fines resulting from a criminal conviction.
In addition, there is a variant of corrective measures dedicated to extreme or irremediable cases of over-indebtedness known as the Personal Recovery Procedure or PRP. This procedure leads to a judicial liquidation of the property of the plaintiff.
After the liquidation, the procedure is closed by the judge, which entails the cancellation of all debts except criminal fines, food allowances, taxes or criminal remedies pronounced by justice.
Getting out of debt is a matter of mechanism and especially commitment. top