Overindebtedness is legally defined as the inability of a person of good faith to honor his debts (bills, credits, rent …).
Overindebtedness, a legal framework defined
The rather recent evolution of the phenomenon has greatly advanced laws and regulations on this subject, with, among other things, better accountability at the level of credit and the creation of a commission of indebtedness.
The structural components
The analysis of the households in debt distress situation dealt with by the commission highlights the following cases of due:
- Arrears of current consumption
- Housing debts
- Tax debts
- Energy accountability and communication (utility bills)
- Miscellaneous credits (consumption, personal loans, etc.)
- Bank overdrafts
Study of possible causes
Economic origin: the over-indebtedness has become in a way a barometer of social precariousness of the borrower. The current situation and the macroeconomic data argue for an accentuation of trend. The repayment capacity is burdened by stagnant incomes, rising unemployment alongside current housing charges (including rising energy costs).
Societal analysis: According to the Good bank “the last typological survey published on December 8, 2014 confirms the preponderance of fragile personal situations (64.4% of single people), the importance of difficulties with respect to employment (50, 1% of over-indebted persons without professional activity), the modest level of monthly resources (less than 50.5% of cases) and the high proportion of cases without reimbursement capacity (54%). “
Solutions and prevention
The over -indebtedness commission was set up in each department to help people in difficult situations. Any household can request the commission of over-indebtedness to examine its file. In the event of recognized debt distress, it will act as an intermediary between debtor and creditors ) to facilitate the return to a normal situation.
For more information, visit the Good bank website. With respect for rights to consumer credit and in a citizen approach, Sofinco makes every effort to avoid situations of over-indebtedness:
- Redemption of credits which leads to lower monthly payments.
- Personal loan with a great modularity of repayments.
- Study and acceptance of each application with a credit check.