An over-indebted person can accept help from a relative, but during a case before the Banque de France over-indebtedness commission any unauthorised new loan can cost the benefit of the plan, and so-called miracle lenders are usually fraudsters.
What French law means by over-indebtedness
The French Consumer Code defines over-indebtedness as the obvious inability of a person acting in good faith to meet non-business debts that are due or about to fall due. Filing a case with the Banque de France costs nothing at all.
A ban on adding to your debts
Once the case is declared admissible, the debtor must not take out new loans or worsen their insolvency without the agreement of the commission or the judge. A private loan arranged in secret can lead to the debtor losing the protection of the procedure.
FICP registration and how long it lasts
Filing a case triggers registration on the FICP, the national credit-default register run by the Banque de France. It lasts for the duration of the plan, up to seven years, or five years after a personal recovery; see borrowing while listed on the FICP.
A debt owed to a relative belongs in the file
An earlier family loan must appear in the list of debts declared to the commission. The relative who lent becomes a creditor like any other: the claim can be rescheduled, reduced or written off in a personal recovery without court-ordered liquidation.
Repaying a relative first is not allowed
During the procedure, paying a family creditor ahead of the banks or the landlord amounts to unequal treatment of creditors. The commission may see it as a lack of good faith, so it is wiser to declare the debt and let the plan organise repayments.
Family help given as a gift instead
A parent wishing to support an over-indebted person may prefer a modest gift or paying an energy bill directly rather than lending. A gift creates no new debt, but it must be reported to the commission if it changes the household's resources.
Budget advice centres and social workers
Points conseil budget, state-approved budget advice centres listed in the official public directory, support struggling households free of charge. They help prepare the over-indebtedness file, negotiate with creditors and avoid the one loan too many that would tip the budget over.
Supported microcredit rather than a private loan
After a plan, supported personal microcredit, distributed through partner charities and partly guaranteed by the state, can pay for a vehicle or a training course. Our page on microcredit and its alternatives presents this regulated scheme in more detail.
Fraudsters who target people on the register
Fake lenders post adverts promising a loan even when listed on the FICP or over-indebted, on Facebook or in forums. They demand insurance or notary fees and then vanish; the list of fake private lenders records their recurring tricks.
A relative buying out all your debts
A relative who pays off every debt of an over-indebted person to replace them with a single loan must obtain the commission's agreement if a procedure is under way. Otherwise the operation can be challenged and jeopardise the protection already obtained.
After the plan: rebuilding without relapse
When the plan and the FICP registration end, bank credit becomes accessible again. A budget that is actually followed, a precautionary savings cushion and a written contract for any family help reduce the risk of having to file a second case.
A private lender facing an over-indebted borrower
A lender may ask the borrower whether a procedure is under way but has no access to the FICP. Lending to an over-indebted person exposes the lender to the claim being written off, so only an amount you can afford to lose is reasonable.
What an over-indebted person should do before any new loan
- List every debt, including family loans, with the amounts still owed and the names of the creditors.
- Book an appointment with a budget advice centre or a local social worker to analyse the household budget.
- File the over-indebtedness case with the Banque de France free of charge, online or at a branch counter.
- Tell the commission about any offer of help from a relative and ask for permission before taking a new loan.
- Follow the adopted plan, keep proof of every payment and inform the commission if your income changes.
- Turn down any lender found online and report suspicious adverts to PHAROS, the French online reporting platform, or to the police.
Costs and consequences for an over-indebted borrower
| Item | Indicative benchmark | Consequence |
|---|---|---|
| Banque de France case | Free | No paid intermediary is needed |
| FICP registration | Up to 7 years (5 years after personal recovery) | Very limited access to bank credit |
| Unauthorised new loan | No direct cost | Risk of losing the protection of the procedure |
| Interest on a family loan | Often zero | Always below the usury rate |
| Upfront fees demanded by a fake lender | Variable amount | Money lost and no loan paid out |
Papers to gather for the case and for family help
- Over-indebtedness case filing form
- Identity document and proof of address
- Payslips, pension statements or benefit certificates
- Credit agreements, debt statements and family IOUs
- Rent receipts and energy bills
- Admissibility decision and plan adopted by the commission
- Written agreement from the commission for any new debt
Mistakes that make over-indebtedness worse
- Borrowing from a friend during the procedure without telling the commission, which can cost you the benefit of the measures.
- Leaving a family loan out of the declared debts to protect a relative, at the risk of being judged in bad faith.
- Paying file fees to a so-called company promising to get you off the FICP or buy out your debts quickly.
- Answering a guaranteed loan even if over-indebted advert and sending your identity document, opening the door to identity theft.
- Repaying a relative first instead of the landlord or the creditors included in the plan.
Over-indebtedness and private loans: your questions answered
Can I accept money from my parents during an over-indebtedness plan?
A gift can help, but a new loan normally requires the agreement of the commission or the judge. Inform the Banque de France before accepting, because a hidden loan can end the procedure and allow creditors to resume collection.
Will the loan from my brother be written off?
It may be. A non-business family debt is treated like any other claim: rescheduled, reduced or written off in a personal recovery. Your brother must be declared as a creditor and can submit his observations to the commission.
How long does an FICP listing last after filing a case?
Registration lasts throughout the plan or imposed measures, up to seven years, and five years after a personal recovery. Serious repayment incidents outside the procedure also lead to a listing that can last up to five years.
Are there private lenders who specialise in over-indebted borrowers?
No. No serious lender targets people in an over-indebtedness procedure, and regular lending without a licence is illegal. These adverts almost always hide an advance-fee loan scam. Talk to a budget advice centre instead.