If you have big money problems, you probably know that overindebtedness is waiting for you. But this is not a fatality. If you are looking for ways to make your life better financially, then you are in the right place! I will show you in this article how to do not be stuck Bank of France, and how to continue to borrow so as not to miss the opportunities real estate or business you might encounter.
My advice: 12 precautionary measures to take IMMEDIATELY before it’s too late
The roads leading to over-indebtedness are winding, but once borrowed, it’s hard to get out. The loss of your job, long-term unemployment, a serious illness, a divorce, a death … These are all factors that can aggravate your financial situation.
Your credits accumulate without seeming, and it is the infernal spiral that begins: borrowing to change cars, buying an apartment on credit, revolving loan, revolving credit …
And at some point, you will ask yourself how to avoid over-indebtedness?
The 2 facts that must alert you:
- Your repayments almost exceed your income.
- You have less and less money to enjoy the little pleasures of life.
1. Always make sure your credits
You can always get out financially if you end up with a disability as a result of an accident, or if you lose your job.
The range of insurance is wide. Above all: read the footnotes carefully before signing the contract.
If making sure you have a prize, the game is worth it.
You can still compete among institutions by taking out a new, cheaper policy with an insurer outside your bank. Between insurers, competition is ruthless.
2. Never stop saving
I know, saving money is not easy every day.
But whether to make a transfer each month on your booklet A, or to place longer term money on life insurance for example, it will still allow you to respond to an unforeseen financial emergency .
This is why some people prefer to buy their home without personal contribution, to keep some savings aside. This calculation, which has a cost too, is not nearly as bad as it looks.
3. Know how to anticipate
You have to stop having a short-term vision of your finances and your monthly income. We must see further, and anticipate what can happen good or bad in your life.
Adopting healthy behaviors can get you out of an embarrassing situation, with over-indebtedness having a big impact on everyday life as I will explain later.
3. React as quickly as possible
If you have not been able to anticipate, you can react. Better late than never.
You are too many to push your head in the sand when it’s not right. On the contrary, get right and take the necessary action immediately.
In case of bank loan difficult to repay, you must go to your banker and explain the situation. See with him if it is not possible to arrange your debt by lowering the monthly payments or obtaining a deferral of repayment of a few months. This approach is also possible with credit organizations.
4. Multiply the leads to find money urgently
- If you work or touch the RSA, it is possible to anticipate your transfer when time is running out.
- If you are an employee, you can apply for a payday advance from your employer.
- If you receive social assistance, you can get a loan from CAF (Family Allowance Fund).
On this subject, read carefully my 4 other articles: these few minutes can change your future.
- The loan of honor from the CAF to buy a car.
- All the aid and credits of the CAF.
- CAF loans to pay your bills and your rent.
- How to get a social micro credit CAF
Debt management and repayment are the two most important conditions for avoiding over-indebtedness.
You can also go to an association to get a small credit. Read the Emmaus microcredit to pay its debts.
5. Stop making credits until your situation stabilizes
You have to stop the loans if the situation becomes dangerous, and especially those that cost you most: including consumer loans, personal loans and revolving credits.
This money “easy” and accessible in a few clicks quickly rushes people who can not repay in poverty.
Avoid revolving (or renewable) credits
In the series of things to avoid, revolving credits should be banned if you are in financial difficulty.
Indeed, they have too high interest rates. And above all, it’s too tempting to use his reserve. As a result, we rarely pay them back completely, and during this time, the interest runs.
I want to draw your attention to the rate of wear. You are protected, but you must absolutely inform yourself!
6. Learn how to manage your budget
If your credits have been a problem for you for a long time, it’s because you can not manage your budget and you’re buying credits a bit too lightly.
Sometimes you even forget to mention them to your financial institution or worse yet, you borrow to pay your debts.
Why do you have to tell your banker everything?
Because it will calculate your solvency ratio. Your credits and your financial expenses must not exceed 30% of your income. Better yet: do the math yourself before going to see him to get you into more debt!
This video can help you manage your budget. It was made with a member of CRESUS, the association that fights against the over-indebtedness. It gives you 15 tips.
Your budget must be realistic
Take a paper and a pencil, and list your expenses in a column, your income on the column opposite. When I talk about expenses, it’s ALL expenses.
This includes petrol for the car, shopping, exits, telephone bills, energy bills (electricity, gas), water, rent, public transport, mutual insurance, insurance, a holiday … Make the family game, you will see that the list is long!
In your income, you have your wages, your investments, the various and varied pensions …
7. Try to negotiate
Your suppliers are not stupid.
The people to whom you owe money want to get it back, but rather than not having anything at all, they will probably prefer a negotiated solution: longer repayment terms or a discount on the debt.
8. Think about credit redemption
If the negotiations with your creditors do not succeed, remains the solution of the repurchase of credit. The principle is simple: an organization gives you a global credit, which will cover the reimbursement of all your existing credits.
See also my complete article on the purchase of credit for debt distress.
The monthly repayment will decrease, although in the end, the total cost of credit will be much higher. On the other hand, there will be only one interlocutor.
Another solution: the pawnshell of your property (the repurchase).
9. Change your consumption habits
Start by changing the way you behave with money, spending less.
Lowering your lifestyle will allow you to have more cash to pay off your debts. For that, sort the essential and the accessory in your habits of consumption.
Do like me: watch for promotions to pay less and not give up some essential things.
10. Only borrow when you can
I know, it’s easier said than done. But the best, especially if it is a mortgage is to be on a permanent contract, or to have stable income. Also take care of your bank overdraft and no longer be exposed, ideally several months before borrowing!
If you make a loan to buy a home, do it with a personal contribution. You will have less money to borrow, and the rate that the bank will offer you will be much better.
The longer the loan, the higher the rate. To find the best rate, I suggest you go through a broker. It’s his job to find the best deals on the market.
11. Put the banks in competition
A few points of difference on a credit rate and it is several thousand euros that fly away over a few years.
All this to tell you that we should not throw you on the first bank that tells you yes to make your loan. You are the customer, and you have to be desired, by putting them in competition.
This fight rate is healthy and you could well benefit from “special promotions” or “discounts” if you compare before signing.
12. Get married under the separation of property regime
Love yes, but protecting yourself. And I’m not talking here about the trifle, but about the diet you will choose when you get married.
Do not look for: always opt for the separation of property regime in your marriage contract.
Thus, even if one of the spouses is left with debts to know only what to do, the other will not be impacted and all the property of the couple will not be auctioned. In concrete terms, this means that if one of the spouses contracts a loan alone, the other spouse will not be required to repay the debts.
If you have applied these 12 tips, you are less likely to be over-indebted. To convince you, let me tell you about the consequences of a Bank of France card.
Here is what awaits you
Do your best to avoid the Banque de France and apply the prevention measures and advice that I have just listed, even if there is no quick fix.
Because if you find yourself in debt to the neck, you will end up enrolled in the FICP (Bankruptcy Credit Repayment File) of the Bank of France.
The reasons for the listing
The FICP registration will be made if you miss 2 repayment dates or if you have a bank overdraft of more than 500 €, which is not regularized within 2 months.
If you write a check without provisions, you will be listed on the FCC (Central Check File) file.
To know more if you think to be in this case there: how to know if one is registered FICP.
FICP: The consequences
On your personal situation
The first is the least enviable. You will not be able to:
- borrow money.
- you bring bail.
- make credit redemption.
And it can last between 5 and 7 years if you benefit from a conventional plan of recovery!
On your relationship with your bank
The second consequence is that you will encounter difficulties with your bank. It will not allow you any more overdraft. You will only have access to basic services.
But do not confuse the FICP registration with the banking ban. In principle, the bank will leave you your checkbook and your credit card.
An article that may interest you: make a credit with an over-indebtedness file.
How to get out?
You will be able to get out of the file by erasing all your debts and paying off your creditors. This is the only way to do away with all this before the blackout time.
If it is not done in the next few days, contact the bank that registered you with FICP.
But I wrote a much more complete article on the Banque de France de-billing . I invite you to consult it.
The over-indebtedness file
If in spite of all my advice you did not manage to stop the inevitable, it will have to go through there: the filing of a file of overindebtedness.
Know that it’s free, and that’s already good news. You can buy one from any Banque de France branch. If the file passes, it is the debt commission that will negotiate with creditors.
Now, if you set up my advice, there is no reason to get there.
The measures imposed by the over-indebtedness commission when your file is admissible
First, she will see if you can repay all your debts or if she can set up a conciliation with your creditors. If this is not possible, she will take the necessary measures.
It will begin by taking stock of your expenses and resources
In particular, she will find out how much you need to live (this amount can not be less than the RSA) by evaluating all your expenses. You will need to provide proof for most of them.
She will also evaluate your resources.
It will then apply one or more of these measures
- Reschedule your debt.
- Do you pay only capital (not interest).
- Suspend the debts.
- Lower the interest rate.
- Clear your debts.
- Reduce the amount of your home loan.
Preventing over-indebtedness effectively: the example of Switzerland
To avoid finding yourself in this complicated situation, look also at what is happening elsewhere in Europe. Because the French are not the only ones to cumulate debts and credits.
The Swiss, for example, are not all rich and are also affected by this phenomenon.
Prevention arrives very early
The sooner we intervene to stem debt, the less likely it is that they will multiply.
This is why Switzerland is talking about over-indebtedness, budget and spending control to young people, so that they understand the issues. It’s not worse. The first debts arrive at the assets before their 25 years.
Do not hesitate to talk money with teenagers. It’s not taboo. Switzerland does it with some success. The debt, the problems of accounts … As on the other subjects the young people have questions to which the services of the Swiss youth answer.
In the end, you have to face the facts: living above your means is dangerous, and if you want to spend too much, you can lose everything. My adage: one must know reason to keep. If you still want to make a loan anyway, read this: How to borrow when stuck?