Sickness, job loss, divorce, accident … no one is safe from a bad spell. When this happens and you have one or more auto credits in progress, it can become difficult to continue to repay your monthly payments.
Whatever the case, there are solutions to remedy these financial problems and prevent or get out of debt situation, before you commit to financing …
How to prevent a difficult financial situation?
First of all, knowing how to recognize the warning signs of a difficult financial situation is important in order to be able to guard against any eventuality of overindebtedness. If payment of refunds begins to fall behind and you are having more and more trouble paying your car loans, do not wait: make an appointment with an advisor from your lender. He can evaluate your case and help you find appropriate solutions to solve your problems.
Depending on whether it is a temporary problem or a lasting problem, the solution to be considered will obviously not be the same. In fact, if the difficulty is only temporary, a staggering of the debt, an additional repayment period or a recourse to revolving credit may be enough to restore the situation.
On the other hand, if the situation is set to last, it may be preferable to make a credit redemption to avoid a ban on bank credit or to seize the Commission of over-indebtedness as a last resort. In any case, remember that only a specialist can help you make the right choice.
The repurchase of credit
To reduce the amount of monthly repayments, the purchase of credit is particularly suitable for people with multiple consumer credit. If you are experiencing lasting financial difficulties, this type of credit can help you regain some of your purchasing power.
Mobilized by all individuals regardless of their age and income, this credit buy-back otherwise called credit pooling all credit car, mortgage or other consumer credit in a single monthly rate.
Offering better visibility on your borrowing capacity thanks to the consolidation of all your credits in a single monthly payment, the purchase of credits can help reduce your debt ratio thanks to several levers: a more advantageous rate, a decrease in the amount of monthly payments and lower insurance costs.
The revolving credit
Subscribing to a revolving credit can also help you in case of financial difficulty. The principle of this device operates on the basis of a so-called reserve credit line (authorized amount) calculated by the credit institution.
When you use your line of credit, a monthly charge is made to your bank account until the reserve amount is replenished. Serving both to repay the borrowed capital and to pay the insurance contributions and monthly interest, this “reserve credit” is attractive because it requires no justification for the use of funds.
The problem with this credit is that you may be tempted to draw on your reserve to reduce your purchasing power and thus aggravate your financial situation. Since interest rates are higher and the amount of monthly payments is often low, the cost of credit is all the more expensive.
This credit can therefore be a solution to overcome temporary difficulties provided that an early repayment is made as soon as possible. For people in persistent financial difficulty, it is better to negotiate an amicable solution with the lender.
Why seize the over-indebtedness commission?
If the credit institution refuses to negotiate an amicable solution or if the repayment terms granted are insufficient, you have the possibility to request a grace period from the magistrate: if your request is accepted, you will be able to a period of up to two years to repay your private debts regardless of the credits concerned (consumption or renewable).
The judge’s decision may also suspend any recovery proceedings against you and allow nullity of interest on the sums due over the period of time. This “grace” can be refused if the judge considers that you live beyond your means or that you already have too many credits to your liabilities.
In case of refusal, it is possible to enter the Personal Debt Commission for free to request the reorganization or cancellation of all or part of your non-professional debts. Either your file is receivable and your debts repayable.
A recovery plan or taxable measures are then proposed. Either your debt is deemed non-refundable, in which case a judicial reinstatement with or without bankruptcy is submitted to you.
How to mount an over-indebtedness file?
To build an over-indebtedness file, you must be a natural person and you must justify your good faith (no false statements). The file can be deposited with the Commission of overindebtedness in a personal capacity or be the object of a common request (spouse, concubines or pacsés). It must be sent to the departmental secretariat of the Commission by post or delivered on site.
To be admissible, it will have to justify a situation of indebtedness characterized. This means in other words that he will have to prove your manifest inability to repay all past, present and future non-professional debts.
As soon as the file is filed, you are counted in the Personal Credit Reimbursement Incident File (FICP) for the duration of the procedure. If the file is considered incomplete or inadmissible, you are removed from the FICP. If this is not the case, at the end of the procedure, you remain enrolled for a variable period depending on the measure of over-indebtedness.