Over-indebtedness commissions: definition

People in over-indebtedness can sometimes go to the over-indebtedness commission to try to find a solution to their financial problems.
In a case of over-indebtedness, it is not possible to take out a loan buy-back in order to lighten the weight of your monthly loan payments and increase your living balance. Also, in order to lower the amount of his monthly payments by grouping his loans using a loan buy-back spread over a longer period, the important thing is to react upstream, before the situation of over-indebtedness.

Borrowing explains everything you need to know about the debt commission.

What is the debt commission?

What is the debt commission?

Created by the Neiertz law of December 31, 1989, the over-indebtedness commissions constitute the central element of the over-indebtedness procedure established since 1990. This commission is responsible for finding solutions to the insolvency situation of its applicants, and there exist one per department. Their secretariat is provided by Lite Lender establishments.

What is the purpose of the debt commission?

What is the purpose of the debt commission?

The objective of the debt commission is to find solutions to help people get out of debt. Their role is to offer a mediation service between debtors unable to honor their financial commitments and their creditors, so as to find the optimal solution for both parties, for example the establishment of an over -indebtedness plan..
Debts subject to a possible dispute resolution are necessarily non-professional debts such as tax arrears, mortgage loans, rental arrears, consumer loans, bank overdrafts or any other type of non-professional origin debt.

What is the composition of the debt commission?

What is the composition of the debt commission?

The members of the debt commission are the following:

  • the prefect of department: he chairs the commission,
  • a representative of family or consumer associations,
  • a representative of credit organizations who is appointed by the prefect, on the proposal of AFECEI (French Association of Credit Establishments and Investment Companies),
  • the treasurer-payer general (TPG),
  • the departmental director of tax services,
  • the local representative of the Lite Lender : he acts as secretary to the commission.

Since 2003, two additional people can participate in the debt commission in an advisory capacity in the event of a personal recovery procedure:

  • a social sector professional,
  • a lawyer.

Who can refer to the debt commission?

Who can refer to the debt commission?

The referral to the debt commission can only be done by natural persons.
It does not matter the nationality of the applicant. The over-indebtedness commission can be referred to by a French person as well as by a foreigner. Persons domiciled abroad can also seize it when they have contracted debts with creditors resident in France.

Referral can only be made when these are non-professional debts. Craftsmen, traders and farmers cannot therefore seize it.

Next, the applicant must prove that he is unable to repay his debts.
The applicant must prove his good faith: he must not have deliberately aggravated his situation with a view to bringing the over-indebtedness procedure into play.

The functioning of the debt commission

The functioning of the debt commission

When the conditions for referral are met, the person must then file a file with the over-indebtedness commission of the department in which he resides. The secretariat of the debt commission depends on the branch of the Lite Lender in the department. The file then includes a certain number of documents intended to consider the capacity of reimbursement of the applicant in view of his situation.

The following documents are requested:

  • a photocopy of the family book so as to justify the composition of the applicant’s family
  • proof of income (salary slips, retirement pensions, etc.)
  • the essential elements making up the assets (title deeds, proof of ownership of a vehicle, photocopy of bank accounts to determine the amount of savings, etc.)
  • the main elements necessary for determining family expenses (proof of real estate loans for owners or rent receipts for tenants, photocopy of current invoices, proof of various credits such as consumer loans…).

As soon as the file is submitted, the commission has three months to render a decision on admissibility or inadmissibility. In the first case, the various stakeholders will be informed, while in the second case, only the debtor is informed.

In the event of admissibility, the commission may propose a rescheduling of debts, or on the contrary a cancellation of debts.
If the file is inadmissible, the debtor will have to repay his debts.