Over-indebtedness
The situation of a good-faith individual manifestly unable to meet all their non-professional debts. The case is handled by the Banque de France over-indebtedness commission, which can reschedule or write off debts. A broker must be able to spot the warning signs that lead to it.
Key points
- Manifest inability of a good-faith individual to meet all their non-professional debts.
- Handled by the Banque de France over-indebtedness commission, which proposes a plan.
- Leads to a FICP entry and can result in partial or total debt write-off.
- The broker must spot early warning signs to redirect the client before this stage.
Frequently asked questions
How is an over-indebtedness procedure triggered?
The individual files their own case with the Banque de France over-indebtedness commission in their department. The commission verifies admissibility, notably good faith, then instructs the case with the relevant creditors. Once declared admissible, a repayment or write-off plan can be imposed on the creditors.
What is the difference between over-indebtedness and personal bankruptcy?
In France there is no strict 'personal bankruptcy' for individuals outside commercial activity; the over-indebtedness procedure is its civil equivalent. The most extreme measure it can trigger is personal recovery, which leads to the write-off of all non-professional debts and is akin to a form of total discharge.
Can a broker still help a client in an over-indebtedness situation?
Rarely, because the FICP entry closes access to standard bank financing. The broker can however direct the client toward social support or loan consolidation upstream of the procedure, when the situation has deteriorated but is not yet irreversible. Intervening early is the key.
In practice
A client with a debt ratio exceeding 60% and several arrears consults a broker; the broker directs them toward a loan consolidation to bring the total monthly payment to a sustainable level, thereby avoiding a filing with the over-indebtedness commission.
Put it into practice with CourtImmo
See how CourtImmo software helps brokers on this topic:
Official sources
- File an over-indebtedness dossier · Service-Public.gouv.fr
- Over-indebtedness · Banque de France
- Obtaining a mortgage loan · Service-Public.gouv.fr