State of indebtedness and direction of the debt distress case
Verified 01 January 2024 - Directorate for Legal and Administrative Information (Prime Minister)
When the Debt Relief Commission declares a file admissible, it examines the applicant's situation and reports on his debt (or statement of liabilities).
This status determines the direction to be given to the file, i.e. the procedure for dealing with the over-indebtedness to be applied (conventional recovery plan or measures imposed or personal recovery).
Here are the main steps to assess the debt situation and guide the debt overhang:
Step-by-step approach
When the Debt Relief Commission declares a file admissible, it examines the applicant's situation and establishes the state of his debt (or statement of liabilities). This is done by examining the file, but also by obtaining information from persons or bodies concerned by the applicant's situation.
Hearing of the persons concerned by the case
Over-indebted persons may request an interview with the Commission to explain certain aspects of their case which they consider necessary to clarify. The request for an interview must be sent by simple mail or submitted to the secretariat of the committee.
The committee may convene the over-indebted creditors or anyone else at a meeting to get information about the case. The commission sends the summons by registered letter with acknowledgement of receipt.
It can also do a appeal to creditors published an advertisement in a newspaper of legal advertisements distributed in the department where it sits.
Information Survey
The commission may be provided with any information and documents enabling it to establish an exact financial situation of the over-indebted party.
It can obtain information from the following organizations:
- General government
- Social bodies
- Banque de France (central check file, national file of credit repayment incidents to individuals)
- Credit institutions
They can ask for a social survey from local and regional authorities and social security bodies.
The debt status (statement of liabilities) drawn up by the commission shall be attached to the decision of admissibility communicated to the over-indebted person and to its creditors.
The debts in this statement can no longer generate interest or late penalties until the procedure for dealing with over-indebtedness is implemented.
The parties (creditors, sureties, over-indebted) may modify the statement of liabilitiesas established by the commission.
By creditors
The commission shall inform each creditor of the state of its claimas declared by the over-indebted person.
The creditor then has 30 days to update the amount of that claim, providing the commission with the supporting documents for the claims concerned. He must also indicate whether his claims have given rise to a security and whether that security has been activated.
By sureties (guarantor)
The person who's been carrying himself surety shall be informed of the engagement of the over-indebted party in proceedings before the over-indebtedness commission. The information shall be given to him by registered letter with acknowledgement of receipt.
From the receipt of this letter, the guarantor has 30 days to inform the commission of the amount that it has already paid to the creditors of the over-indebted as part of its undertaking to guarantee.
By over-indebtedness
The over-indebted party must send his request either by letter lodged by the secretariat of the commission or by letter sent to the secretariat of the commission by registered letter with acknowledgement of receipt.
The letter must be signed and include the following information:
- Identity and address of over-indebted person
- Contested claims
- Grounds for the challenge
The judge of the court of justice shall give final judgment on the application by order. It sets out the nature and amount of the claims, which are included in the final statement of indebtedness.
After analyzing and verifying all the elements provided by the parties (creditors, sureties, over-indebtedness), the commission adopts a statement of liabilities definitively terminated which details the indebtedness of the over-indebtedness. It shall inform the over-indebted party and its creditors of the date on which that state was arrested.
The over-indebted person may contest the debt position adopted by the committee. He has 20 days to ask the commission to refer the matter to the judge of the court of justice to ascertain the validity and amount of the claims.
The commission, after examining the applicant's situation, shall orient the file according to the seriousness of his situation of over-indebtedness.
The committee must decide on the direction of the file within three months of the date mentioned on the certificate of submission of the file.
Repayment of debts (total or partial) possible
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The over-indebted owns real estate
Where the commission considers that debt restructuring is possible, it shall seek conciliation with the creditors by means of a conventional recovery plan.
The over-indebted do not own real estate
Where the Commission considers that debt restructuring is possible, it may draw up measures imposed, after having received comments from the over-indebted party and its creditors.
Cannot pay off debts
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Over-indebted people own goods that can be sold
Where the committee considers that no financial solution is possible (irreparably compromised situation), the commission may - with the agreement of the over-indebted party - bring an action before the judge of the court of justice to open a personal reinstatement procedure with bankruptcy.
Over-indebted people have no assets that can be sold
Where the committee considers that no financial solution is possible (irreparably compromised situation), the commission may impose a personal reinstatement procedure without judicial liquidation.
Please note
the over-indebted person may contest the orientation of his file towards a personal recovery procedure, subject to certain deadlines.
Case not referred beyond 3 months
The commission must give guidance to the over-indebtedness dossier within three months of the date mentioned on the certificate of submission of the dossier.
Where that time limit is not observed, the commission shall send the over-indebted party a certificate by simple letter specifying the date from which the rate of outstanding loans is to be fixed at statutory interest rate during the following 3 months:
The creditor is an individual who is not acting for professional purposes | Other cases (including creditor is a professional) | ||
|---|---|---|---|
2024 | 2e semester | 8.16% | 4.92% |
2024 | 1er semester | 8.01% | 5.07% |
2023 | 2e semester | 6.82% | 4.22% |
2023 | 1er semester | 4.47% | 2.06% |
2022 | 2e semester | 3.15% | 0.77% |
2022 | 1er semester | 3.13% | 0.76% |
2021 | 2e semester | 3.12% | 0.76% |
2021 | 1er semester | 3.14% | 0.79% |
2020 | 2e semester | 3.11% | 0.84% |
2020 | 1er semester | 3.15% | 0.87% |
2019 | 2e semester | 3.26% | 0.87% |
2019 | 1er semester | 3.40% | 0.86% |
2018 | 2e semester | 3.60% | 0.88% |
2018 | 1er semester | 3.73% | 0.89% |
2017 | 2e semester | 3.94% | 0.90% |
2017 | 1er semester | 4.16% | 0.90% |
2016 | 2e semester | 4.35% | 0.93% |
2016 | 1er semester | 4.54% | 1.01% |
2015 | 2e semester | 4.29% | 0.99% |
2015 | 1er semester | 4.06% | 0.93% |
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Procedure (general rules)
Jurisdiction of the court in matters of over-indebtedness
Referral to committee
Referral to committee
Referral to committee
Examination of admissibility
Examination of admissibility
Suspension and prohibition of enforcement proceedings and transfer of remuneration
Suspension of expulsion measures
Other effects of admissibility
Statement of liabilities
Verification of claims
Folder Orientation
Folder Orientation
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