State of indebtedness and direction of the debt distress case

Verified 08 January 2025 - Directorate for Legal and Administrative Information (Prime Minister)

As soon as the debt commission considers a case to be admissible, it seeks to gain a better understanding of the situation of over-indebtedness and establishes the detailed statement of its debts. On the basis of this information, the committee seeks to determine the procedure for dealing with over-indebtedness which best corresponds to its situation (it fixes the direction of the debt distress case). We'll explain.

The Commission shall establish the state of indebtedness over-indebted from information in the over-indebtedness file.

She's joining this debt condition the decision on the admissibility of the case.

It shall send the decision by registered letter with acknowledgement of receipt to the over-indebted party and to its creditors.

Creditors then have 30 days to challenge the amount of their claim. They must send to the commission the documents proving their claims, and if the guarantor has been called upon.

The commission may also make a appeal to creditors. For this purpose, it publishes an advertisement in a newspaper of legal advertisements distributed in the department where it sits. The notice shall specify the period within which creditors must declare their claims to the secretariat of the commission by registered letter with acknowledgement of receipt.

After analyzing and verifying all the information provided to it, the committee adopts the detailed statement of debts, with their discounted amount.

The Commission shall inform the over-indebted of the detailed statement of debts which she has established. This notification it shall be sent to him by registered letter with acknowledgement of receipt. The notification shall also indicate to him that he may contest this detailed statement of debts.

In order to contest this, the over-indebted party must, within 20 days, either send a signed declaration by registered letter with acknowledgement of receipt or deliver it to the secretariat of the commission. This statement must state his full name and address, the claims he is contesting and the reasons for his contestation.

It is up to the protection litigation judge to verify the validity and amount of the claims.

In order to define the direction to be given to the case of over-indebtedness, the commission determines the minimum amount to be left to the over-indebted. This minimum amount corresponds to the amount of its unavoidable expenses. To this end, the committee shall assess its life budget.

Assess your resources

The commission takes into account any type of resource, whether or not it is seizable, received by the over-indebted (salaries, family benefits, maintenance, compensatory benefits, survivors' pensions, etc.).

FYI  

If the over-indebted person lives as a couple (married, past, common-law), but is the only one to have filed a file of over-indebtedness, the commission asks him for information:

  • Either on the resources of the spouse, partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact, cohabiting partner not participating in the proceedings,
  • Or on the sharing of the current loads of the torque.

This information is necessary to establish the share current expenses of over-indebtedness.

Evaluate your expenses

Some expenditures are taken into account at their actual level, others are assessed according to a scale, and still others can be readjusted beyond that scale.

For example, rent, taxes, property taxes, mortgage insurance, dependant care expenses, and maintenance and compensatory payments are taken into account for their actual amount, on the basis of documentary evidence. However, professional transport costs, heating costs and health costs (including mutual insurance) can be taken into account beyond the scale, on the basis of a proof.

FYI  

The amount of expenditure of the life budget adopted by the commission on over-indebtedness not be less than amount of active solidarity income (SSA).

The Debt Relief Commission (DRC) is steering the case according to the seriousness of the financial situation of the debt distress.

It has to make that decision within 3 months after the date mentioned on the certificate of deposit of the file.

Possible guidelines vary depending, in particular, on the ability to repay the debt overhang:

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Over-indebted people can pay all or part of their debts

  • When the Over-Indebted Has Real Estate, the commission may propose to the over-indebted party and its creditors to negotiate a conventional recovery plan. The idea is to introduce a temporary freeze on debt repayments or monthly payments adapted to the situation of over-indebtedness.
  • When the over-indebted has no real estate, the commission may determine the necessary measures over-indebtedness and creditors. The idea is to introduce a temporary freeze on debt repayments or monthly payments adapted to the situation of over-indebtedness.

Over-indebted people cannot pay their debts

  • When the assets of the over-indebted have a market value, the commission may, with the agreement of the over-indebted party, refer the matter to the judge of the court of justice for the opening of a personal reinstatement procedure with bankruptcy. This procedure makes it possible to wipe out all debts of the over-indebted.
  • When the assets of the over-indebted have no market value, the commission may impose a personal reinstatement procedure without judicial liquidation. This procedure makes it possible to wipe out all debts of the over-indebted.

Where the Commission does not give guidance to the over-indebtedness dossier within 3 months of the date mentioned on the certificate of deposit, it shall send a simple letter to the over-indebted party attesting to that situation. This document shall also indicate the date from which the outstanding borrowing rate of the over-indebted debt is reduced to statutory interest rate for the following 3 months, unless the commission or the judge decides otherwise.

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