From the beginning of November, the calendar of consumer credit reform provides for the application of new measures concerning over-indebtedness and the repurchase of credits. The objective: a more responsible credit practice.
More transparent credit restructuring operations
The repurchase of credits is a tool which can be well adapted to help people in situation of debt distress. However, it is primarily intended for borrowers who have taken out several loans and who wish to improve their financial situation, by reducing the amount of their monthly payments or by simplifying the management of all their repayments.
The consumer credit reform now requires lending institutions to provide more transparent information in the event of credit restructuring. This includes specifying the costs of their credits before and after the restructuring operation. In addition, if the client has contracted revolving credits, the financial institution must imperatively offer him the closing of these revolving credits. These measures should help borrowers in difficulty to regain financial stability.
Benefits for over-indebted people
With the consumer credit reform, over-indebtedness files should experience a strong acceleration in the time taken for proceedings. The Minister of the Economy Cherry Lombarde , estimated at 120,000 the number of people who will leave the National File of Credit Repayment Incidents (FICP) in the first weeks of November. One in six over-indebted households!
For people in the Personal Recovery Procedure (PRP) the duration of their filing will be
reduced from 8 to 5 years and for those engaged in a plan to reimburse an over-indebtedness commission, it will be reduced from 10 to 5 years if they reimburse their plan without incident. In the event of a reimbursement of the plan, registration will be extended but the total duration of registration may not exceed a maximum of 10 years.
In addition, banks will be obliged to maintain their services to these customers, including in the event that they have already filed an over-indebtedness file. In addition, thanks to the abolition of release penalties provided for by the reform, the cancellation of the FICP will be done at no cost. Finally, persons registered in the Central File of Unpaid Checks (FCC) will only have to regularize their unpaid checks to be removed from the file.