The consequences of over-indebtedness can be particularly painful to live and put you in a difficult situation. In particular, you risk being the subject of a banking procedure that will prevent you from having a credit card or issuing checks without counting the possible seizure of your property.
Moreover, being over-indebted is a major obstacle to your file in case you want to subscribe a new credit. It will then be almost impossible for you to get new ments to cope with unforeseen expenses or your projects.
Characteristics of the repurchase of credit
The Credit Redemption is a plan that is based on the principle of grouping two or more credits into one. All forms of credit (real estate auto work consumption) and even personal debts can be included in the procedure. The indebted person will then have only one creditor to whom he will have to repay all of his debts.
One of the main interests of the redemption of credits is the renegotiation of the repayment terms. The repurchase of loan makes it possible to rebalance the budget and to reduce the rate of indebtedness, the repayment monthly payments are revised down and adapt to the available incomes of the debtor(s). In addition, since there will be only one loan in progress and therefore only one bank withdrawal per month, the procedure allows significant savings on premiums and insurance costs. Note that the interest rate applied to the credit can also be renegotiated with the new creditor.
Do not confuse poorly indebted and over-indebted
The accumulation of credits irremediably leads to an increase in the debt ratio of a person, especially when his income does not increase accordingly. In general, overindebtedness is a personal bankruptcy for which a person is no longer able to sustainably face his various expenses due to a repayment of credit too important.
A person with modest incomes is generally considered to be over-indebted as long as the monthly payments for the repayment of his debts reach 33% of his monthly budget or even more. As long as this threshold is not crossed, we will speak rather of a poorly indebted budgetary situation.
Filing an over-indebtedness file as a last resort
It is strongly recommended to make a loan of repurchase of credits as soon as your rate of indebtedness is relatively high. An unexpected decline in your income can indeed make you switch into a situation of poor debt. The restructuring of your debts is therefore an important precaution, especially since it is a quick and easy solution to allow you to control your again.
The filing of an over-indebtedness file with the Banque de France should only be considered when all other recourses have been tried. This is indeed an extreme solution where you will notably be banned from credit for several years. In return you benefit from legal protection that allows you to suspend the seizure of your property and reminders of your creditors for a certain period to relieve your situation. Of course this procedure does not issue you with your debts that you will always have to pay in accordance with a recovery plan that will be set up by the over-indebtedness commission.