Procedure before the personal over-indebtedness commission
LexInter | August 18, 2002 | 0 Comments

Procedure before the personal over-indebtedness commission

Article L331-1
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law n ° 98-657 of July 29, 1998 art. 86 Official Journal of July 31 1998) Law of August 1, 2003

At least one individual over-indebtedness commission is set up in each department.
It includes the representative of the State in the department, president, the treasurer-payer general, vice-president, the director of tax services. Each of these persons may be represented by one and the same delegate, under conditions fixed by decree. The committee also includes the local representative of the Banque de France, who provides its secretariat, as well as two personalities chosen by the representative of the State in the department, the first on the proposal of the French Association of Credit Institutions and Financial Institutions. investment firms, the second on the proposal of family or consumer associations.
A deputy for each of these personalities is appointed under the same conditions.

A person providing proof of experience in the field of social and family economy as well as a person providing proof of a diploma and experience in the legal field are associated with the examination of the case and attend the meetings of the over-indebtedness commission in an advisory capacity.

Article L331-2
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law n ° 98-657 of July 29, 1998 art. 87 Official Journal of July 31 1998)  Law of 1 August 2003 article 11

The mission of the commission is to deal with, under the conditions provided for in this chapter, the over-indebtedness situation of natural persons defined in the first paragraph of article L. 330-1, as well as the commitment it has given. to guarantee or to discharge jointly and severally the debt of an individual entrepreneur or of a company if he has not been, in law or in fact, a manager of the latter.

The amount of reimbursements resulting from the application of articles L. 331-6 or L. 331-7 is fixed, under conditions specified by decree, by reference to the garnishable portion of the salary as it results from article L 145-2 of the Labor Code, so that part of the resources necessary for current household expenses is reserved for it as a priority. This share of resources, which cannot be less than an amount equal to the minimum integration income available to the household, is set by the committee after consulting the person with proof of experience in the field of social and family economy. referred to in the last paragraph of Article L. 331-1, andmentioned in the conventional recovery plan provided for in Article L. 331-6 or in the recommendations provided for in Articles L. 331-7 and L. 331-7-1 ..

Article L331-3
( Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law n ° 98-657 of July 29, 1998 art. 89 and art. 100 Journal Official of July 31, 1998)  Law of August 1, 2003

The procedure is initiated before the commission at the request of the debtor. The latter has six months from the filing of the file to proceed with its investigation and decide on its orientation.
The commission verifies that the applicant is in the situation defined in article L. 331-2. In the event of rejection of a debit notice subsequent to the notification of the admissibility decision, the creditors may not collect any costs or commissions relating thereto.
The commission draws up the debtor’s debt statement. The latter is required to declare to it the active and passive elements of its assets. When the commission finds that the repayment of one or more debts of the principal debtor is guaranteed by a surety, it informs the surety of the opening of the procedure. The surety may make his observations known in writing to the commission.
The debtor , informed of this option by the notification of the admissibility decision, is heard at his request by the commission. The latter can also hear any person whose hearing it deems useful, provided that this is provided free of charge.
The commission can publish an appeal to creditors.
After having been informed by the commission of the statement of liabilities declared by the debtor, the creditors have a period of thirty days to provide, in the event of disagreement on this statement, the justifications of their claims in principal, interest and accessories. . Failing that, the debt is taken into account by the commission in view of the only elements provided by the debtor. Information to credit institutions and Treasury accountants can be done by fax or email under conditions set by decree.
Creditors must then indicate whether the claims in question have given rise to a surety and whether the latter has been activated.
Notwithstanding any provision to the contrary, the committee  may obtain communication from public administrations, credit institutions, security and social welfare organizations as well as the services responsible for centralizing banking risks and payment incidents, of any information of a nature. to give him exact information on the debtor’s situation, the possible evolution thereof and the amicable conciliation procedures in progress.If the examination of the request reveals that the debtor is in the irreparably compromised situation defined in the third paragraph of article L. 330-1, the commission, after having summoned the debtor and obtained his agreement, seizes the judge. ‘execution for the purposes of initiating personal recovery proceedings. The failure of the debtor to respond to the summons is deemed to be the refusal of this referral. In the event of refusal by the debtor, the commission resumes its mission under the terms of Articles L. 331-6, L. 331-7 and L. 331-7-1.

“The execution judge is competent to hear appeals against decisions made by the commission in matters of admissibility and orientation of the file.
Local authorities and social security organizations carry out social inquiries at their request.

Article L331-4
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law n ° 98-657 of July 29, 1998 art. 90 Official Journal of July 31, 1998)
The commission informs the debtor of the statement of liabilities that it has drawn up. The debtor who contests this state has a period of twenty days to ask the commission to refer the matter to the execution judge, for the purpose of verifying the validity of the debt securities and the amount of the sums claimed, indicating the debts. contested and the reasons justifying its request. The commission is bound to grant this request. After the period of twenty days, the debtor can no longer make such a request. The commission informs the debtor of this period.
Even in the absence of a request from the debtor, the commission may, in the event of difficulties, seize the enforcement judge for the same purposes.
Article L331-5
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law n ° 98-46 of January 23, 1998 art. 5 Official Journal of January 24 1998) (Law n ° 98-657 of July 29, 1998 art. 91 Official Journal of July 31, 1998)
The commission may refer the matter to the execution judge for the purpose of suspending execution proceedings instituted against the debtor and relating to debts other than maintenance. However, after the publication of an order for the purposes of seizure of real estate, the judge of the seizure of real estate is the only competent to pronounce the suspension of this procedure. In urgent cases, referral to the judge may take place on the initiative of the chairman of the committee, the latter’s delegate, the local representative of the Banque de France or the debtor. The committee is then informed of this referral.
This is acquired, without being able to exceed one year, until the approval of the conventional recovery plan provided for in Article L. 331-6 or, in the event of failure of the conciliation, until the expiry of the time limit set by the decree of the Council of State provided for in Article L. 333-8 available to the debtor to ask the commission to make recommendations in application of Articles L. 331-7 and L. 331-7- 1 (1st paragraph). In the event of a request made within this period, it is acquired until the judge has granted enforceability to the recommended measures, in application of article L. 332-1, or, if it has been seized in application of Article L. 332-2, until it has ruled.
When, in the event of a foreclosure, the auction date has been set, the commission may, for serious and duly justified causes, refer the matter to the judge for the purpose of remitting the auction, under the conditions provided for by Article 703 of the Code. of civil procedure (old).
Unless authorized by the judge, the decision pronouncing the provisional suspension of enforcement proceedings prohibits the debtor from doing any act that would aggravate his insolvency, from paying, in whole or in part, a debt other than maintenance arising prior to this decision, from paying disinterest the sureties who would discharge debts born previously, to make an act of disposal foreign to the normal management of the patrimony; it also prohibits the taking of any guarantee or surety.
Article L331-6
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law of August 1, 2003)
The commission’s mission is to reconcile the parties with a view to drawing up a conventional recovery plan approved by the debtor and his main creditors.
The plan may include measures to postpone or reschedule debt payments, forgive debt, reduce or eliminate the interest rate, consolidate, create or substitute collateral.
The plan may make these measures subject to the performance by the debtor of acts designed to facilitate or guarantee the payment of the debt. He may also make them subject to the debtor’s abstention from acts which would aggravate his insolvency.
The plan provides for the modalities of its execution.Its total duration, including when it is the subject of a review or renewal, may not exceed ten years. The measures of the plan may exceed these deadlines when they concern the repayment of loans contracted for the purchase of real estate constituting the main residence and whose plan makes it possible to avoid the transfer by the debtor.
Article L331-7
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law n ° 98-46 of January 23, 1998 art. 6 Official Journal of January 24, 1998) (Law n ° 98-657 of July 29, 1998 art. 92 Official Journal of July 31, 1998)
In the event of failure of its conciliation mission, the commission may, at the request of the debtor and after having enabled the parties to provide their observations, recommend all or part of the following measures:
1 ° 1 ° Reschedule the payment of debts of any kind, including, where applicable, deferring the payment of part of them, without the delay or rescheduling being able to exceed ten years or half of the remaining repayment period of the loans In progress ; in the event of forfeiture of the term, the postponement or rescheduling period may reach half of the period remaining to run before the forfeiture;
2 ° To charge payments, first to the capital;
3 ° Prescribe that the sums corresponding to the maturities or rescheduled will bear interest at a reduced rate which may be lower than the legal interest rate on a special and reasoned proposal and if the debtor’s situation so requires. Whatever the duration of the recovery plan, the rate cannot be higher than the legal rate.
4 ° In the event of a forced sale of the principal accommodation of the debtor, subject to a registration benefiting a credit institution that has provided the sums necessary for its acquisition, reduce, by special and reasoned proposal, the amount of the fraction of the remaining mortgage loans. due to credit institutions after the sale, after charging the sale price to the outstanding capital, in proportions such that its payment, together with a rescheduling calculated as stated above, is compatible with the resources and debtor charges. The same provision is applicable in the event of amicable sale, the principle of which is intended to avoid foreclosure of real estate, and the terms and conditions have been agreed between the debtor and the credit institution. In any event, the benefit of these provisions cannot be invoked for more than two months after being summoned to have to pay the amount of the fraction of the mortgage loans remaining due, unless, within this period, the commission has been capture. Under penalty of nullity, the summons to pay reproduces the terms of this paragraph.
The commission may recommend that these measures be subject to the performance by the debtor of appropriate acts to facilitate or guarantee the payment of the debt. It may also recommend that they be made conditional on the debtor’s abstention from acts which would aggravate his insolvency.
For the application of this article, the commission takes into account the knowledge that each of the creditors might have, when entering into the various contracts, of the debtor’s debt situation. It can also verify that the contract was entered into with the seriousness required by professional practice.
The total duration of the recommendations cannot exceed ten years. They may, however, exceed this period when they concern the repayment of loans contracted during the purchase of real estate constituting the main residence and whose recommendations of the committee make it possible to avoid the transfer. Tax debts are rescheduled under the same conditions as other debts.
The debtor’s request made in application of the first paragraph interrupts the limitation period and the time limits for taking action.
Article L331-7-1
(inserted by Law n ° 98-657 of July 29, 1998 art. 93 I Official Journal of July 31, 1998) ( Law of August 1, 2003)
When the commission notes without accepting its irremediable nature, the insolvency of the debtor characterized by the absence of resources or seizable assets likely to allow all or part of his debts to be discharged and rendering inapplicable the measures provided for in article L . 331-7, it can recommend the suspension of the enforceability of receivables other than maintenance for a period which cannot exceed  two years.. Unless the commission proposes otherwise, the suspension of the debt entails the suspension of the payment of interest due in this respect. During this period, only the sums due in respect of the capital can automatically be productive of interest, the rate of which does not exceed the legal rate.At the end of the period referred to in the first paragraph, the commission re-examines the debtor’s situation. If this situation allows, it recommends all or part of the measures provided for in Article L. 331-7. If the debtor remains insolvent, it recommends, by a special and reasoned proposal,  partial cancellation of debts. Those for which the price has been paid in place of the debtor by the surety or the co-obligated cannot be canceled . Tax debts are subject to total or partial remission under the same conditions as other debts. No new erasure may take place, within a period of eight years, for debts similar to those which gave rise to an erasure.

Article L331-7-2

(Law of August 1, 2003)

If, during the execution of a contractual plan or recommendations, it appears that the debtor’s situation becomes irreparably compromised under the conditions provided for in the third paragraph of article L. 330-1, the debtor may apply to the commission in order to to benefit from a personal recovery procedure. After having noted the good faith of the debtor, the commission seizes the execution judge for the purposes of opening the procedure. The plan or recommendations whose execution has been interrupted are null and void.

Article L331-8
( Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law n ° 98-657 of July 29, 1998 art. 93 II Official Journal of July 31, 1998)
The measures recommended in application of article L. 331-7 or of article L. 331-7-1 and made enforceable by the application of article L. 332-1 or of article L. 332 -2 are not enforceable against creditors whose existence has not been reported by the debtor and who have not been notified by the commission.
Article L331-9
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995) (Law n ° 98-657 of July 29, 1998 art. 93 III Official Journal of July 31, 1998)

Creditors to whom the measures recommended in application of Article L. 331-7 or of the first paragraph of Article L. 331-7-1 and made enforceable by application of Article L. 332-1 or of the Article L. 332-2 are opposable cannot exercise enforcement proceedings against the assets of the debtor during the execution period of these measures.

Article L331-10
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995)
The parties may be assisted before the commission by any person of their choice.
Article L331-11
(Law n ° 95-125 of February 8, 1995 art. 29, art. 30 Official Journal of February 9, 1995 in force on August 1, 1995)

The members of the committee, as well as any person who participates in its work or is called upon to deal with the situation of over-indebtedness, are required not to disclose to third parties the information of which they became aware in the context of the procedure instituted by this chapter, barely the sanctions provided for in article 226-13 of the penal code.

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