An over-indebted senior does not need a new loan. What they need is a procedure that freezes, reschedules or cancels what they owe. In France this means filing a dossier de surendettement (an over-indebtedness application) with the Banque de France. It is free, open to retirees and working people alike, and can lead to a repayment plan of up to seven years or, where the situation is hopeless, to the debts being wiped out.
Among the over-60s, over-indebtedness usually grows out of an ordinary chain of events: retirement cuts income, revolving credit taken out during working life lingers, a spouse dies, health costs mount. Creditors chase, charges pile up. The good news is that the system offers particular protection to people whose income will not rise again.
File an application or negotiate on your own?
If your non-business debts lastingly exceed what you can repay, the procedure is the right tool. When only one debt is causing trouble, direct negotiation, or negotiation backed by a Point conseil budget, is sometimes enough. These free, state-approved advice services help you draw up a repayment schedule and deal with the bank; the Unaf-Udaf family associations network runs 228 of the roughly 500 in existence.
Who qualifies
You must be an individual acting in good faith, living in France, with non-business debts you clearly can no longer pay. There is no age limit. A retired craftsman can file for his personal debts, while debts from his former business fall under the commercial court's collective procedures. A British or American retiree resident in France is eligible on the same terms, and French debts as well as those owed to foreign creditors must be declared.
What actually changes once you file
Once the application is declared admissible, enforcement measures are suspended and you are listed on the FICP, the Banque de France register of loan repayment incidents, for as long as the measures last, seven years at most. The commission draws up a plan, imposes measures or refers you for personal recovery. It protects a minimum monthly income that may not fall below the RSA (the French minimum income) and tries, as far as possible, to let you keep your main home.
Huguette, 74, in figures
Huguette receives a 1,350-euro pension. She pays five revolving credit lines totalling 640 euros a month and owes 2,800 euros in energy bills. After rent and charges, she is more than 300 euros short each month. The commission sets her repayment capacity at about 220 euros, freezes interest and spreads repayments over 84 months, with the balance possibly cancelled when the plan ends.
Personal recovery when there is no way out
When there is no repayment capacity at all and the assets have no real value, the commission can recommend rétablissement personnel sans liquidation judiciaire, a personal recovery without court-ordered sale: the debts are cancelled and the FICP listing lasts five years. If you own property, a judge can cancel the debts after the assets have been sold. For a retiree on the ASPA minimum pension, this outcome is common.
Solutions from the lightest to the most protective
| Situation | Solution | Effect on the FICP | Who to see |
|---|---|---|---|
| A single missed payment | Payment schedule agreed with the creditor | Avoided if arrears are cleared in time | Creditor, Point conseil budget |
| Tight budget, several loans still being paid | Budget support, cautious consolidation | None | Crésus, Udaf, Crédit municipal |
| Debts that can no longer be repaid | Over-indebtedness application, plan of up to 7 years | Listed for the duration of the plan | Banque de France, with a charity's help |
| No repayment capacity | Personal recovery | Listed for 5 years | Commission, then judge |
Getting help from a charity
Crésus Alsace, which pioneered a network of more than 130 local offices, supports over-indebted households at every stage: understanding the procedure, building the file, explaining the decision and the routes of appeal, then following the plan. The Udaf and the Points conseil budget do the same. This help prevents creditors from being forgotten, a frequent cause of incomplete files.
Documents to gather
Collect an identity document, pension statements from every fund (foreign ones included), your tax notice, three months of bank statements, your lease or property tax notice, and a complete list of debts with the creditors' latest letters and repayment schedules. Family, tax and rent debts must be listed just like loans.
Debts the procedure cannot erase
Maintenance payments, criminal fines and certain debts arising from benefit fraud cannot be cancelled. They must still be declared, because the commission takes them into account when working out what remains available each month.
The procedure step by step
- Contact a Point conseil budget, an Udaf or a Crésus association for a free first assessment.
- Fill in the over-indebtedness form, online or on paper, and attach every supporting document.
- Submit the file to your département's commission secretariat or via the internet.
- Wait for the admissibility decision, normally within three months; enforcement is then suspended.
- Study the commission's proposal, whether a plan, imposed measures or personal recovery, which you can challenge.
- Stick strictly to the plan and inform the commission of any change in income or circumstances.
Mistakes that jeopardise the application
Taking out a new loan while the file is being examined, or paying one creditor ahead of the others, can lead to rejection for bad faith. Leaving out a debt, even one owed to relatives, distorts the plan. Paying a company that promises to buy back your debts or prepare the file for a fee is pointless: the procedure is free, and so is help from the charities.
Borrowing during the plan
In principle the plan forbids you to add to your debts. A microloan for an essential need, such as replacing a car you cannot do without, may sometimes be considered with the commission's agreement. For a small emergency, a pawn loan at the Crédit municipal, which involves no register check, remains an option to discuss with your adviser.
Rebuilding once the plan is over
When the measures end, you are removed from the FICP automatically. The next step is to build up a small emergency fund before any credit, avoid revolving credit reserves and, for a project, choose a short instalment loan from your bank or a Crédit municipal.
Meanwhile, several forms of help ease the pressure without debt. The Fonds de solidarité logement can help with rent or energy arrears, the CCAS can grant emergency aid and your pension fund a one-off payment. The chèque énergie and the complémentaire santé solidaire cut everyday costs, and having housing benefit recalculated on current income frees up a few tens of euros a month.
Questions over-indebted seniors ask
Will my house be sold? Not necessarily. The commission tries to preserve the main home; a sale is considered only if it is essential to clear large debts.
Can my pension be seized? Part of a pension can be seized according to a legal scale, but admissibility suspends seizures. The ASPA itself can never be seized.
Will my children have to pay my debts? No, unless they are co-borrowers or guarantors. On your death they can renounce the estate or accept it up to the net assets.
What does an application cost? Nothing. Filing and processing by the Banque de France are free, as is help from the charities and the Points conseil budget.
Can I file in France for debts owed to a UK bank? If you live in France, the French commission can take foreign debts into account in its plan, though enforcing its measures against a creditor abroad can be more complicated. Declare everything and ask your adviser how such creditors are usually handled.
Organisations and offers to contact
- Banque de France – over-indebtedness flowchart : Official diagram of the stages of an application, from admissibility to a plan of up to seven years or personal recovery, with FICP listing periods.
- La finance pour tous – surendettement : The IEFP financial education site explains the free Banque de France over-indebtedness filing, repayment plans, imposed measures and debt write-off.