Over-indebtedness: measures imposed by the Commission

Verified 07 January 2025 - Directorate for Legal and Administrative Information (Prime Minister)

The Debt Relief Commission may decide to measures imposed where the over-indebted party is able to repay, at least in part, its debts. This decision may be taken either directly after the submission of the debt distress report or after the failure of the attempt to reconcile. We'll explain.

The commission can decide on the measures imposed, either directly after the submission of the over-indebtedness file (this is the case where the over-indebted has no real estate) or after the failure of the attempt to reconcile (in cases where the over-indebted has a property).

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Immediately after the filing of the file

Where the over-indebted person does not own property, the commission shall inform the over-indebted person and its creditors by registered letter with acknowledgement of receipt.

The over-indebted party and creditors have 30 days to make submissions.

After taking these comments into account (if necessary), the Commission may propose measures imposed.

After reconciliation failed

If no agreement has been reached on the conventional recovery plan, the commission notes the failure of the amicable procedure by means of minutes.

The over-indebted party shall be informed by registered letter with acknowledgement of receipt.

It has 15 days to ask the commission to decide measures imposed.

He must make a written and signed request. It may be submitted or sent by simple mail to the secretariat of the committee.

In drafting the application, the over-indebted party may use the following model letter:

Request for measures imposed by the debt distress commission

The commission shall inform the creditors of such a request by registered mail with notice of receipt. Creditors have 15 days to make submissions.

FYI  

If the over-indebted person does not make his request within the 15-day period, he will then find himself in the same situation as before the filing of the over-indebted file: enforcement proceedings (seizure...) and/or expulsion proceedings against him can resume.

The Debt Relief Commission may impose the following measures:

  • Rescheduling of debts over a maximum of 7 years (or, for outstanding loans, over half of the remaining repayment term)
  • Priority repayment of principal
  • Reduction of the interest rate
  • Deferral of debt payments, except maintenance debts (e.g. maintenance due), for up to 2 years.

With the agreement of the over-indebted party, the Commission may impose the following measures:

  • In addition to the previous measures, partial debt relief (except those paid by the guarantor).
  • In the event of the sale of the main dwelling of the over-indebted, the reduction in the amount of the mortgage remaining to be repaid.

The measures imposed as determined by the Commission shall be notified over-indebted and creditors, by registered post with acknowledgement of receipt.

FYI  

This letter informs the creditor lessor that, in the absence of a challenge on its part, the measures imposed automatically replace the time limits and methods of payment of the rental debt previously decided by the judge of the lease.

The over-indebted party or its creditors shall have the opportunity to contest such measures, subject to formal and time-limited conditions.

Over-indebted and creditors have 30 days from receipt of the notification to challenge the measures imposed.

The challenge must be in writing and must be signed.

It shall contain the following information:

  • Name and forenames of the signatory
  • Contested measures and grounds for the challenge.

It must be delivered or sent by registered letter with a request for an acknowledgement of receipt to the secretariat of the Debt Relief Commission.

The commission then forwards it to the registry of the court.

The court registry shall summon the over-indebted party and the creditors at least 15 days before the hearing date by registered letter with acknowledgement of receipt.

The protection litigation judge shall make its decision after having, if it so wishes, creditor appeal in a newspaper of legal announcements distributed in the department where the commission is located, and have the validity and amount of the debts checked.

The judge may decide:

  • Either from life budget over-indebtedness and the measures to be applied (all or part of the measures determined by the commission)
  • Or a personal recovery without judicial liquidation (claims are fixed at the date of judgment)
  • Or a personal recovery with compulsory liquidation, with the agreement of the over-indebted.

There is an appeal against that judgment.

The duration of the measures imposed shall not exceed seven years, save in exceptional cases.

This maximum period may exceed this period in one of the following 2 situations:

  • The measures concern the repayment of loans taken out to purchase the principal residence of the over-indebted person and to prevent its disposal
  • The measures make it possible to repay all debts while avoiding the sale of the principal residence of the over-indebted

The approach is different depending on the type of measures imposed:

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Measures suspending payment of debts

The duration of the debt suspension measures may not exceed 2 years.

At the end of that period, if the situation of over-indebtedness has not improved, it must re-file a debt distress report within 3 months.

Depending on the situation of over-indebtedness, the Commission may propose:

Other measures imposed

If the debt overhang deteriorates financially during the application of the imposed measures, a new debt overhang file must be submitted, so that the debt overhang board can re-examine the entire situation.

The Debt Relief Commission may:

In case of debt for unpaid rent or expenses, the judge of the lease can grant the tenant, under certain conditions, a time limit for repaying this rental debt (maximum 3 years).

When the imposition of measures occurs after the decision of the judge of the lease, the period granted by the commission for over-indebtedness for the payment of the rental debt replaces the period decided by the judge of the lease.

FYI  

  • If this new deadline is the result of a measure postponing the payment of debts, it shall be increased by 3 months to allow the over-indebted party, if necessary, to file a new over-indebtedness file.
  • If the over-indebted person files a new over-indebtedness file within this period, the payment of the rental debt is suspended until new measures are adopted to deal with the over-indebtedness.

However, in the event of a challenge by the creditor to the time limit granted by the over-indebtedness commissionHowever, it is the period of payment granted by the judge of the dispute which replaces the one decided by the judge of the lease.

FYI  

  • If this new deadline is the result of a measure postponing the payment of debts, it shall be increased by 3 months to allow the over-indebted party, if necessary, to file a new over-indebtedness file.
  • If the over-indebted person files a new over-indebtedness file within this period, the payment of the rental debt is suspended until new measures are adopted to deal with the over-indebtedness.

During this new payment period, the effects of rescission clause are suspended, but over-indebted people are still forced to pay rent and expenses.

If the over-indebted person repays his rental debt on the terms laid down, the cancelation clause must be considered as unactivated.

But if the over-indebted party does not repay its rental debt on the agreed terms, the effects of the cancelation clause resume.

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