New anti-debt measures in force

NEW measures that have come into force this week will help one in six families in serious debt to “get back to a normal life and bounce back,” according to the Finance Minister.

The new rules mainly concern people who have either been placed on a register of bad payers, the FICP (consulted by lenders before agreeing loans) due to missed payments, or who are involved in legal procedures related to serious debt.

The latter, known as surendettement, is similar to the procedures available for businesses who declare payment difficulties.

They can initially stave them off with formal support and negotiation with creditors, or eventually declare bankruptcy.

The new rules limit being placed on the register to five years rather than ten or eight, taking 120,000 people immediately off the FICP register.

Other new rules include:
n People who apply to the Commission de Surendettement to undergo debt procedures, and are accepted, will not be able to be sued by creditors.
n For those undergoing the procedures, banks will be forbidden from closing their accounts or sending in bailiffs.
n Applications for the procedures will have to be dealt with faster: at first they go through a stage of being examined by the Banque de France, who will have to do this in three months instead of six. Finance Minister Christine Lagarde says this will reduce the period of “uncertainty”, which can often cause “personal and family breakdown”.

The measures are part of her Consumer Credit Law that was passed by parliament in June.

The Finance Ministry says that out of about nine million people in France who use credit facilities, 2.6 million have repayment difficulties and about 750,000 are officially surendettés.

The president of an association against debt, FFAC, Jean-Louis Kiehl, said the measures do not go far enough and it is necessary to put in place ones which will stop people getting into debt in the first place.

Photo: Remy Steinegger