Hi
I have a French friend who is heavily in debt so that the amount of loans he pays off every month means that taking into his other expenses his outgoings are larger than his income. He has survived like this by taking out loans to cover other loans which is insane but common enough amongst those not financially prudent. I told him not to take out any more loans.
My question is what can he do to relieve this problem? In the UK, for example, you can write to the loan company and say you are in financial difficulties and send them a cheque for a nominal amount which if they bank it is then de facto agreement to the lower payments and it is only if there is CJ against you can the bailiffs turn up.
I also know there are debt service charities in the UK like StepChange that will arrange on your behalf to pay the reduced amounts to all your creditors too.
Hi, thanks for replying. We may need more advice on this.
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I am a little out of date now with the procedure but if the debt has been caused by non payment of mortgage I cannot imagine it makes a difference. My friend didn't have one but there were spaces to fill in for every debt. It didn't differenciate. The important thing is to contact the Bank of France and ask for the forms because then all people to whom money is owed will respect these proceedings and wait for a decision without further hassle.
Hope this helps.
Just come across this - would this apply to a mortgage?
Hi Gary,
NO, it is not a problem if your friend is working!! Honestly, people are so fearful for the wrong reasons. Anyone can get into debt, and the surendettement scheme is a means to manage your debt, without losing your assets.
This is not the USA!
Good Luck!
My friend is looking into this but seems worried that because he is working, he will not be able to do this. Is this the case?
Hi Gary,
The advice Karen Phillips gave you is the best. I helped an American friend who ran up extraordinary debts, (over 150,000 euros in credits, unpaid taxes, and a bank foreclosure) by using the surendettement procedure as prescribed under la Loi Borloo. The debt was bought by the commission, re-negotiated with my friend (he was given ten years to pay it off), and the commission found that some credit lenders were charging over the odds on interst rates, so cancelled at a more suitable rate. My friend is now debt-free, has a new bank account and al is well. Also, it is important to remember that this is not a declaration of bankruptcy, but a way of paying off your debts in a negotiable and stress-free way. Good Luck!
Thanks very much. Very helpful.
I can tell you exactly what he must do.
He must contact the nearest branch of the Bank de France and ask for the paperwork for a 'surendettement'.I know this because I helped a friend who didn't speak a lot of French. For us, in the Charente, the bank was in Angouleme. It is a lengthy form and he must supply everything they ask for before it will be considered but in Angouleme the lady who helped my friend was really understanding and once the committee agreed she should have help, the repayments were negotiated for her, some as little as 10€ a month. She had six years to make the payments and then an opportunity to reapply again to enable continued payments. This isn't bankruptcy and she wasn't asked to sell her assets.
My friend had found that trying to negotiate on her own with the companies was impossible but immediately the forms are submitted and accepted, the companies can no longer apply interest so the debt does not continue to grow.
My friend was not working and I believe there is a slightly different system if you are but again I'm sure the department in the bank will advise.
I hope this helps. This information was certainly correct for spring 2013 when we made her second application as the six years had been completed.
There's a wiki article (in French) describing the official procedures, which appear to be nearly as onerous as Bankruptcy in the UK, without totally eliminating the old debts. OTOH, the procedure appears to provided free-of-charge. (See this article - and its links)
There's no shortage of web information if you search for surendettement particuliers and forum surendettement particuliers.