Over-indebtedness: conventional recovery plan

When the over-indebted owns real estate and that its debt is refundable, the commission shall seek to reconcile the debt overhang with its creditors. This conciliation shall cover a conventional recovery planprepared by the over-indebtedness commission.

The conventional recovery plan is intended to reducing the debt burden over-indebted.

To this end, it may provide that the over-indebted party undertakes to take certain actions to facilitate the payment of its debts (for example, changing accommodation if the rent is disproportionate), and not to take any action that could worsen its insolvency (for example, not to take new loans). It may also provide for, for example, a postponement or rescheduling of debt payments, debt forgiveness, reduction or even elimination of the interest rate on the debt.

The Commission notify to the creditors, by registered letter with notice of receipt, the plan it has drawn up.

The creditors have 30 days to reject this proposal.

Failure to reply within that period shall constitute agreement by the creditors.

When the over-indebted and the creditors accept the measures in the plan drawn up by the commission, they sign the plan. In the absence of a response from creditors, only the debt overhang signs the plan.

Each person receives a copy of the plan by simple mail.

The plan shall apply on the date fixed by the Commission. If the commission has not set a date, the plan shall apply at the latest on the last day of the month following the date of the simple letter sent by the commission to the over-indebted party and to the creditors.

The plan may not exceed 7 years, even if it is subject to review or renewal.

But some measures may go beyond that. These are the measures relating to the repayment of loans taken out by the over-indebted party for the purchase of his principal residenceor measures that allow him to pay off all his debts while avoiding the need to sell his principal residence.

If no agreement has been reached, the committee shall record the failure of the amicable procedure in minutes.

It notifies the over-indebted person by registered letter with acknowledgement of receipt.

The debt overhang has 15 days to ask the commission to impose certain measures. The over-indebted party must make this request by signed letter and submit it, or send it by registered mail with acknowledgement of receipt, to the secretariat of the commission.

In preparing the application, the over-indebted party may use the following document template:

Request for measures imposed by the debt distress commission

Creditors shall be informed of such a request by the Commission by registered mail with notice of receipt. They have 15 days to make their comments.

If the financial situation of the debt distress deteriorates during the application of the conventional plan, it must file a new debt distress report, mentioning the current plan.

The Debt Relief Commission will review the situation fully and may decide:

• Either modify the current conventional plan
• Either adopt a new conventional plan
• Either to direct the file to a personal reinstatement without judicial liquidation. This procedure makes it possible to wipe out all debts of the over-indebted.
• Either to direct the file to a personal reinstatement with judicial liquidation. This procedure makes it possible to wipe out all the debts of the over-indebted, but is accompanied by the sale of some of its assets.