Household debt in France: You can now apply online for help

It has become easier for households struggling to cope financially and facing debts to apply for help via a process known as surendettement.

It is now possible to start the process online at Banque de France’s website particuliers.banque-france.fr by clicking on Surendettement.

Previously, you had to take an application to a Banque de France branch – there are around one or two per department.

Lockdown restrictions are thought to be one reason why, despite financial issues linked to Covid-19, requests have fallen by 35% compared to 2019.

Related: One-off French state Covid-19 aid payments due this week

Banque de France branches can be found online here if you prefer to visit in person and talk to a representative.

Another source of information are points conseil budget, free money advice centres. You can locate your nearest one on google maps.

A household is said to be concerned by surendettement when its essential outgoings are more than the money coming in.

Once a dossier has been accepted by a committee at the Banque de France, the person concerned no longer has to pay monthly loan interest or declared debts.

They do have to continue paying ordinary outgoings (electricity bills, etc) and must not take out any new loans. While in this process, the person is also placed on the Fichier des incidents de remboursement des crédits aux particuliers (FICP) register, which lenders consult before making loans.

Another effect of the process is that creditors cannot seize money from the person’s salary. If the committee considers a person is capable of paying off their debts but needs time, it can order that they are only payable over an extended period, up to seven years.

It can also require certain creditors to partly or completely write off debts, or reduce interest rates. It can cancel repayment for up to two years if it thinks your financial situation is likely to improve.

However where the commission cancels debts completely it may require the person to sell certain assets first.

The surendettement process does not concern most businesses, including auto-entrepreneurs, when it comes to business debt. The only exception is small businesses with the status of EIRL (entreprise individuelle à responsabilité limitée).

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