What is over-indebtedness?

It sometimes happens that certain uncertainties weaken the situation of the most precarious individuals, causing them to sink into the spiral of over- indebtedness . When the burden of debt becomes too much to bear, some solutions exist.


Over-indebtedness, an inextricable situation

According to Articles L.711-1 and L.712-2 of the French Consumer Code, “The situation of over-indebtedness is characterized by the manifest impossibility of dealing with all of its non-professional debts due and due”.


These are the non-professional debts that fall under this definition, such as:

  • – current expenses (rents, energy consumption, etc.); 
  • – loans in progress (mortgage loans, consumer loans).


What are the solutions in case of over-indebtedness?


Individuals in good faith who are unable to repay their debts have the opportunity to file an over-indebtedness file with the Commission for overindebted individuals through the Banque de France of the department of the place of residence. This free procedure is accompanied by a number of obligations for the applicant.


The latter will in particular:

  • – report any change in situation; 
  • – continue to pay the charges as well as current bills such as rent, taxes; 
  • – avoid incurring new debts by subscribing to a new credit, or selling a property for the purpose of repaying a creditor.


Excessive Debt Procedure: What Consequences?


Once the over-indebtedness file has been duly completed and filed, the over-indebtedness commission checks the situation and status on its admissibility. If the file is receivable, this will automatically terminate the entries for two years, during which the commission will try to find solutions.

The commission may propose debt repayment measures by means of special conditions or, on the contrary, propose a partial or total write-off of debts. In both cases, the applicant will be registered in the National Register of Incidents of Repayment of Personal Credits (FICP) for a period of 5 years.

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