Over-indebtedness: measures imposed by the Commission

Verified 21 January 2021 - Directorate for Legal and Administrative Information (Prime Minister)

Where the over-indebtedness file is admissible and the debt is repayable (in part or in full), the Commission may decide to measures imposed. The commission takes this decision either directly after the submission of the over-indebtedness file (generally, in cases 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).

Immediately after the filing of the file

Where the situation of over-indebtedness (absence of property, resubmission of a file) makes it impossible to repay all its debts, the commission shall inform the over-indebted party and its creditors thereof by registered letter with acknowledgement of receipt.

The debt overhang and creditors have 30 days to submit their comments.

After taking account (if necessary) of these comments, the Commission proposes measures imposed. To do this, it first determines a life budget.

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.

Tableau - Current living budget: how expenses are taken into account

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.).

The Debt Relief Commission may impose the following measures:

  • Reschedule debts for up to 7 years (or half of the outstanding repayment term for outstanding loans)
  • Prioritize payments for principal repayment
  • Reducing the interest rate
  • Suspend debts, except maintenance debts (e.g. maintenance due), for up to 2 years

In certain cases, it may also take the following measures:

  • Partial write-off of claims (except those paid by the guarantor), in addition to the previous measures imposed
  • Reduction in the amount of mortgage outstanding in case of sale of the main house of the debt overhang

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

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

Challenge the measures imposed

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

The judge makes his decision after having, if he so wishes, had an appeal published to a creditor and checked the validity and amount of the debts.

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 if the debt overhang agrees.

There is an appeal against that judgment.

In the absence of a challenge

In the absence of a challenge within the prescribed period, the commission informs by simple letter the over-indebted party and the creditors (except those who the over-indebted party would not have mentioned at the time of filing its over-indebtedness file) that the measures imposed apply.

The measures shall apply on the date mentioned by the Commission or, if this is not the case, at the latest on the last day of the month following the date of the letter of notification the measures imposed.

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

If the financial situation of the over-indebted person deteriorates during the implementation of the measures imposed, the committee may be asked to:

  • A personal reinstatement without judicial liquidation
  • Or a personal recovery with judicial liquidation

This request must be made by means of a signed letter.

It 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

It must either be deposited with the secretariat of the committee or sent by simple mail to the secretariat of the committee.

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.

After receiving the Commission’s letter noting the failure of the conciliation, the over-indebted has 15 days to ask the Commission to decide on settlement measures (so-called measures imposed).

Warning  

if the over-indebted person does not request settlement measures within the 15-day period, he or she will then find himself or herself in the same situation as before the application for over-indebtedness was lodged: enforcement proceedings (seizure ...) and/or expulsion proceedings against him or her may be resumed.

The request for the debt distress must be made in writing and signed.

It may be submitted or sent by simple mail to the secretariat of the committee.

Request for measures imposed by the debt distress commission

Creditors shall be informed of such a request by the Commission by registered mail with notice of receipt. They have 15 days to make their comments.

The Debt Relief Commission may impose the following measures:

  • Reschedule debts for up to 7 years (or half of the outstanding repayment term for outstanding loans)
  • Prioritize payments for principal repayment
  • Reducing the interest rate
  • Suspend debts, except maintenance debts (e.g. maintenance due), for up to 2 years

In certain cases, it may also take the following measures:

  • Partial write-off of claims (except those paid by the guarantor), in addition to the previous measures imposed
  • Reduction in the amount of mortgage outstanding in case of sale of the main house of the debt overhang

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

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

Challenge the measures imposed

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

The judge makes his decision after having, if he so wishes, had an appeal published to a creditor and checked the validity and amount of the debts.

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 if the debt overhang agrees.

There is an appeal against that judgment.

In the absence of a challenge

In the absence of a challenge within the prescribed period, the commission informs by simple letter the over-indebted party and the creditors (except those who the over-indebted party would not have mentioned at the time of filing its over-indebtedness file) that the measures imposed apply.

The measures shall apply on the date mentioned by the Commission or, if this is not the case, at the latest on the last day of the month following the date of the letter of notification the measures imposed.

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

If the financial situation of the over-indebted person deteriorates during the implementation of the measures imposed, the committee may be asked to:

  • A personal reinstatement without judicial liquidation
  • Or a personal recovery with judicial liquidation

This request must be made by means of a signed letter.

It 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

It must either be deposited with the secretariat of the committee or sent by simple mail to the secretariat of the committee.