Consumer credit: what to do in case of repayment difficulties?

If you are having trouble repaying your monthly consumer credit payments, you can do the following:

1. Check if your insurance can take over
   You can ask your insurer to pay monthly installments on your behalf if the following 2 conditions are met:
   
   • You have taken out credit insurance
   • Your difficulties arise from one of the circumstances provided for in the insurance contract (illness, disability, loss of employment for example).
   
   It is advisable to contact your insurer at the first sign of difficulty, because some contracts provide for reporting deadlines not to be exceeded.
2. Request a maturity deferral or loan fit-up
   You can ask the lender for a deferral of monthly payments or a temporary decrease in monthly payments or a rescheduling or extension of the term of the credit.
   However, the lender is not not obligated to accept.
   Some establishments may offer a free refurbishment, others may charge a fee: it is important to check the conditions provided in your contract.
3. Request a grace period from the judge
   You can apply to the court for a grace period, i.e. a suspension or reduction of monthly payments of up to 2 years.
   During this period, no penalty for delay can be applied and guarantees (deposit, mortgage…) cannot be implemented.
   You will need to provide supporting documents: income, expenses, outstanding loans, proof of difficulties, etc.
4. If your difficulties are important and sustainable, deposit with the Banque de France a over-indebtedness case.
   Credit institutions must provide the over-indebtedness commission with the information necessary to study your case and cannot continue implementing measures once the procedure has been opened.

In case of difficulty of payment, your credit institution shall study the possibility of renegotiate the loan according to your personal situation, via one of the measures following:

• Total or partial refinancing of the credit agreement
• Extension of the term of the credit agreement
• Total or partial suspension of monthly payments for a given period
• Change in the interest rate
• Reorganization of the schedule (for example, reduction of the amount of monthly payments)
• Partial debt forgiveness and debt consolidation.

From 1^er payment incident, the financial institution is obliged to inform you on the following points:

• Risks incurred
• Amount due
• Solutions to regularize your situation

This information must be provided to you on paper or otherwise durable support.

The lender must also notify you in the event of an incident report at refund incident file.

The financial institution may decide, even if you can no longer pay your insurance premiums, to pay them temporarily in your place, so that you do not lose the benefit of the guarantees provided for in the contract.

If the credit union has required you to take out insurance for the loan and you have taken out insurance with an external company, the insurer must inform the credit union that your insurance premiums have not been paid.

When you do not pay your monthly installments, the credit institution has the right to demand immediate repayment of the outstanding principal and interest overdue but not yet paid.

The outstanding principal shall bear interest for the credit institution at the rate of the loan between the date of the delay and the date of your payment.

If the credit is used to finance a lease with a promise to sell or a lease-purchase agreement, the financial institution has the right to demand the restitution of the property and the payment of the rents due but not yet paid.

In the two cases, the credit institution can also claim compensation to cover the damage caused by the lack of payment of monthly installments.

This allowance may not exceed 8% of the remaining balance due.

If the financial institution decides not to require immediate repayment of the outstanding principal, it may offer to renegotiate the loan according to your personal situation, through one of the following measures:

• Total or partial refinancing of the credit agreement
• Extension of the term of the credit agreement
• Total or partial suspension of monthly payments for a given period
• Change in the interest rate
• Reorganization of the schedule (for example, reduction of the amount of monthly payments)
• Partial debt forgiveness and debt consolidation.

Any change must be subject to a endorsement to the contract, delivered on a durable medium.