Tight budget: a credit buy-back or an over-indebtedness case?
Credit and debt can add up to the point of destabilizing your budget. If you are not careful, you can quickly find yourself in a situation of over-indebtedness. In this case, the borrower can decide to carry out a credit buyback operation to lighten his charges or choose to build an over-indebtedness file which will allow negotiating repayment terms with his creditors. How to decide between the two options?
First solution: buying back credit to reduce debt
The repurchase of credits allows you to combine all your monthly payments into one, at the generally lower amount, including your consumer loans or personal loan (car, household equipment, etc …).
This operation aims to considerably reduce your reimbursement rate and to reduce your monthly payments. In some cases, the decrease can reach 50% and you can get out of the red by avoiding the tight end of the month.
In addition, by simplifying your management, buying back credits greatly contributes to your peace of mind. You no longer have multiple monthly payments taken on different dates but only one. On the other hand, even if your rates are renegotiated at lower levels, you will certainly have an extended repayment period. To be interesting, a credit buyback must be carried out by following a few precautions and by including all possible early repayment charges on your previous loans.
Second solution: the over-indebtedness case
An over-indebtedness file is a measure that makes it possible to obtain suitable and more flexible conditions for the repayment of all of your debts.
To do this, it is necessary to compile an over-indebtedness file and attach supporting documents to it so that a commission can study your situation.
The commission first examines your file to determine if you are in a situation of over-indebtedness and if the procedure can be granted to you.
If your file is admissible, you will be informed as well as your creditors and your bank. You will also get a document to send to your creditors or bailiffs. From this point on, all seizures in progress are automatically suspended and prohibited, except with regard to maintenance and criminal debts. You will be able to obtain a rescheduling of some of your debts, or see the total or partial erasure of your debts.
On the other hand, the over-indebtedness file is also accompanied by an automatic registration with the FICP (National Incident File for repayment of loans to individuals), and you will, therefore, be prohibited from banking. In addition, if the over-indebtedness commission retains personal recovery for you, your goods may be sold at auction. It is therefore a measure of last resort and you can first study the possibility of restructuring your debts through a loan repurchase. All the more, if you anticipate the situation.
The earlier you take action, the more leeway you will have. Do not wait to react and take action at the first difficulty.