Over-indebtedness: conventional recovery plan
Verified 21 January 2021 - Directorate for Legal and Administrative Information (Prime Minister)
Where the over-indebtedness dossier is admissible and the debt is repayable, the Commission may direct the dossier towards the preparation of a conventional recovery planunder certain conditions.
When the debt is refundable and the applicant owns real estate, the debt distress commission first seeks an agreement between the parties (creditors and over-indebted).
This agreement takes the form of a conventional recovery plan. It contains solutions to alleviate the debt burden of over-indebtedness (postponement or rescheduling of maturities, debt forgiveness, reduction or elimination of the interest rate, etc.).
In the absence of an agreement, and at the request of the over-indebted party, the committee will decide on the measures imposed.
Please note
when the over-indebted does not own property, the commission may direct the file to measures imposed.
In order to define the measures to be imposed, the commission determines the minimum amount to be left to the over-indebted party so that it can pay its unavoidable expenses.
Please note
the amount of the expenditure of the life budget shall in no case be less than active solidarity income lump sum (SSA).
If the file has been submitted by only one member of the couple (married, past, cohabiting), the committee asks the over-indebted person for information:
- Either on the resources of the spouse, partner of Civil partnerships: titleContent, cohabiting partner not participating in the procedure
- Either on the sharing of the current loads of the torque
This information is necessary to establish the share expenditure incurred by over-indebted persons.
Evaluation of expenditure
Some expenditures are assessed on the basis of a scale, others may be adjusted beyond that scale or retained for their actual amount.
Expenses | Taking into account | |
|---|---|---|
Feeding | Application of a scale | |
Health costs (including mutual) | Actual amount, up to a schedule | |
Tuition fees (for dependants) | Actual amount (must provide proof) | |
Child care expenses (dependants) | Actual amount (must provide proof) | |
Hygiene costs | Application of a scale | |
Clothing | ||
Dwelling | Rent (excluding charges) | Actual amount (must provide proof) |
Home Insurance | Actual amount (proof may need to be provided), up to a scale | |
Water | ||
Electricity (excluding heating) | ||
Telephone | ||
Heating | Application of a scale | |
Household products | ||
Taxes (on income, property taxes...) | Actual amount (must provide proof) | |
Maintenance (paid) | ||
Compensatory benefit (paid) | ||
Travel costs between home and work | Personal vehicle | Application of a scale |
Public transport | Actual amount (must provide proof) | |
Other transport costs | Application of a scale | |
Asset Assessment
The commission takes into account any type of resource, whether seizable or not, received by the over-indebted (salaries, family benefits, maintenance, compensatory benefits, widow's pensions, etc.).
Committee seeks agreement between over-indebted and creditors taking into account the life budget that she determined. In this context, it sets out proposals for plans on which the debt overhang and creditors can agree.
Measures put in place
The conventional plan’s goal is to alleviate the debt burden of the over-indebted person.
In this context, the amount allocated to the repayment of the debt shall be assessed by the commission, less the life budget, without that amount exceeding the difference between its actual resources and the active solidarity income lump sum (SSA).
From there, the plan may include different measures, combined or not:
- Deferral or rescheduling of one or more debts
- Debt forgiveness
- Consolidation, creation or substitution of collateral
The plan may also provide for certain commitments by the applicant:
- Performing acts to facilitate or secure the payment of its debt (e.g. sale of part of its property)
- Promise not to do anything that could worsen your insolvency (for example, not to take new credit)
FYI
priority is always given to housing debts. And no rescheduling, forgiveness or forgiveness is possible without the creditor's agreement for maintenance debts, damages and fraudulent debts against a social protection agency.
Proposal of the plan to creditors
The plan drawn up by the Commission shall be notified creditors by registered letter with request for notice of receipt.
The creditor has 30 days to reject this proposal.
In the absence of a reply within that period, the agreement of the creditor shall be deemed to have been obtained.
Agreement on debt distress and creditors
If the over-indebted and the creditors agree on the envisaged measures, the conventional plan is signed and dated by the over-indebted and its creditors.
Each person receives a copy by simple mail.
The plan shall enter into force on the date fixed by the Commission. If this is not the case, it shall apply no later than the last day of the month following the date of the letter by which the commission informs the parties (creditors, over-indebted) of the approval of the plan.
Please note
if the over-indebted party fails to meet its commitments, 15 days after a formal notice has been unsuccessful, the plan is no longer applicable and creditors can resume their recovery procedures. The over-indebted person cannot file a new file of over-indebtedness, unless it can justify new circumstances.
In the absence of agreement
If no agreement has been reached, the committee 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.
Within 15 days of notification, the over-indebted person may ask the commission to impose certain measures. The application must be signed, filed or sent to the Commission Secretariat by registered mail with notice of receipt.
Warning
in the absence of a request from the over-indebted party, the over-indebtedness file is closed and creditors can resume their recovery procedures.
The commission then notifies the creditors that they have 15 days to submit their observations.
The plan may not exceed 7 years, even if it is subject to review or renewal.
However, measures may exceed this duration in one of the following two situations:
- They concern the repayment of loans taken out to purchase the principal residence of the over-indebted
- They allow the over-indebted to repay all of their debts, while avoiding the sale of their principal residence
In the event of an over-indebtedness, the financial situation of which deteriorates during the course of the plan, the committee may be asked to:
- A personal reinstatement without judicial liquidation
- Either a personal reinstatement procedure with judicial liquidation
This request must be made by means of a signed letter, deposited or sent by simple mail to the secretariat of the commission.
The letter shall contain the following information:
- Surname, forenames and address
- Family situation
- Detailed statement of income, debts and assets
- Circumstances in which the over-indebtedness situation has become irreparably compromised
Determination of capacity to repay
Determination of capacity to repay
Conventional plan
Conventional plan
If the plan fails: Article R724-3
Banque de France
National Institute of Consumer Affairs (INC)
Banque de France