What is a restructuring operation?
Debt restructuring or loan redemption is a financial operation that aims to consolidate several loans of different durations and rates, in a single operation, in order to obtain a lower monthly payment, but over a period of time. longer repayment.
Debts that can be grouped
It is possible to integrate all loans in progress, whatever their nature:
- Consumer credit
- A reserve of money
- A mortgage
- A bank overdraft
- Unpaid invoices
- Unpaid taxes
- Personal debts
Find a solution
When one thinks of redeeming one’s debts, it is generally that one can no longer cope with its maturities and that its debt is well above 33% of its income. Whatever the urgency of the situation, we advise you to resort to restructuring only as a last resort. The first step is to look for solutions by oneself.
3 steps to follow step by step
Make a clean cut in some of his monthly expenses.
List the monthly withdrawals on your budget and eliminate those that can be stopped: a subscription to a bouquet of pay channels, a phone plan too high and too often exceeded. If possible, opt for a small secure package. Find among your current credits, those that end soon and try to get a bank overdraft or a family loan to clear them. The repayment of an overdraft or a family loan often has the advantage of being flexible in terms of repayment.
Renegotiate the staggering of each debt
If a restriction of your expenses is not sufficient, try to negotiate directly the staggering of your debts with each creditor. Contrary to popular belief, know that it is often possible to obtain a spread. This is the case for example with the tax administration, which is much more conciliatory than we think. If you have a mortgage, check in the preliminary offer if you have the modularity options that reduce the monthly payments up to 30% or even suspend for a year.
You should also know that credit institutions prefer to spread the debt rather than having to do the debt commission of the Bank of France. This is probably the case of traders to whom you owe money and who appreciate more a direct approach to their debtors rather than receiving a letter from the commission informing them of your financial difficulties.
Finally, it is recommended to present a reasonable schedule and especially accurate. Do not sow doubt in the minds of your creditors by proposing to settle in the year or the months to come or even worse when your situation has improved. Make your proposals in writing by committing yourself to meet deadlines.
Set up an over-indebtedness file
If your attempts have not been successful and before considering meeting banks to redeem your loans, we advise you to set up an over-indebtedness file. This is completely free, the commission in charge of studying your file trying above all to help you.
If your application is considered admissible, it will contact all your creditors: banks, specialized institutions, suppliers, administrations… It will propose an amicable settlement of your situation and a spread of your debts. It is highly advisable to prove to the commission that you are willing to make efforts.
It is therefore essential, once the file has been filed, to stop any expenditure that is not essential. Please note that your application has the immediate effect of you file the FICP (credit repair incidents file to the individual). Your bank will know immediately before the commission is determined on your file.
If your situation is such that it does not allow any solution, the commission may consider a reorganization procedure. If you have some property (other than what is necessary for your daily life or the practice of your profession), a court decision may decide to sell it.
Attention: the debts concerned by the procedure must not have professional origins.
Renegotiate: instructions for use
We can not advise you to be extremely cautious if you have to redeem your credits through a specialized agency. It is also quite possible that you meet an intermediary in banking (broker)
Play the competition
Do not hesitate to meet several brokers and think about asking the amount of their fees. Build several repayment scenarios over several durations. Refuse any proposal that is to “grow” the amount of the new loan in order to release a capacity of savings. Intermediaries who offer this type of solution wear a double hat and try to sell you a savings transaction, most often under life insurance. Do not stray from your goal of reducing expenses and improving your budget.
You can eventually provide additional capital to build cash up front, but the most important thing is to reduce your overall debt.