Can an individual entrepreneur file a debt distress report?

Verified 01 January 2025 - Directorate for Legal and Administrative Information (Prime Minister)

You are an individual entrepreneur and you are experiencing lasting financial difficulties (personal or professional debts)? You can initiate a procedure to respond to your situation (over-indebtedness procedure, reorganization or bankruptcy procedure). The steps to take vary, depending on whether you have professional debts or not and personal debts. We'll explain.

FYI  

Individual business The sole trader shall carry out one of the following professional activities in the form of a trader: farmer, craftsman, trader, liberal profession or micro-entrepreneur.

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Business and personal debt

If you have long-term financial difficulties, and you have professional debts and personal debts, you must enter:

  • If you are engaged in a liberal or agricultural activity, the court of law of the place where you carry on your activity.
  • If you have a commercial or craft activity in a municipality that falls under the jurisdiction of the judicial court of Avignon, Auxerre, du Havre, du Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc or Versailles, the courts of economic activities.
  • If you have a commercial or craft activity in another city, the commercial court.

To do this, you need to make a request for the initiation of collective proceedings for the sole proprietor. In this form, you must specify the following choices:

It is the court that will decide the procedure for dealing with your debts, given your financial situation.

FYI  

If the separation of your business and personal debts is distinct, the court may:

  • For your professional debts, open a bankruptcy or bankruptcy procedure,
  • For your personal debts, send your file to the commission of over-indebtedness, provided you have your agreement. If you do not agree, your personal debts will be included in the process of dealing with your professional debts.

If you have ceased your activity as a sole trader on the day on which the court rules, the court will open, for all your debts, a court-supervised administration procedure or a court-supervised liquidation procedure.

Business Debts

If you have lasting financial difficulties, and you only have business debts, you must enter:

  • If you are engaged in a liberal or agricultural activity, the court of law of the place where you carry on your activity.
  • If you have a commercial or craft activity in a municipality that falls under the jurisdiction of the judicial court of Avignon, Auxerre, du Havre, du Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc or Versailles, the courts of economic activities.
  • If you have a commercial or craft activity in another city, the commercial court.

To do this, you need to make a request for the initiation of collective proceedings for the sole proprietor. In this form, you must specify in this form if you want a judicial redress procedure or a bankruptcy proceedings.

It is the court that will decide the procedure for dealing with your debts, given your financial situation.

Personal Debts

The process is different depending on whether you have or have not stopped working:

You have ceased your professional activity

Individual business If you only have personal debts and you have had your company formalities office, you can file a debt distress report.

Other case

If you have lasting financial difficulties, and only have personal debts, you must enter:

  • If you are engaged in a liberal or agricultural activity, the court of law of the place where you carry on your activity.
  • If you have a commercial or craft activity in a municipality that falls under the jurisdiction of the judicial court of Avignon, Auxerre, du Havre, du Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc or Versailles, the courts of economic activities.
  • If you have a commercial or craft activity in another city, the commercial court.

To do this, you need to make a request for the initiation of collective proceedings for the sole proprietor. In this form, you must specify that you want a over-indebtedness procedure.

It is the court that will decide the procedure for dealing with your debts, given your financial situation. With your agreement, the judge can refer the debt overhang commission.

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