Over-indebtedness and your home in France

Who can file an application, and is the home an obstacle?

Service-public.gouv.fr sets four conditions: being a natural person, being French or a foreign national living in France, being unable to pay your current or future debts, and acting in good faith. Mortgage instalments are among the debts taken into account.

The home does not block the application. The mere fact of owning your main residence, even if its estimated value when the application is filed equals or exceeds your total non-business debts, cannot prevent a finding of over-indebtedness (art. L711-1, in force since 16 February 2022). The committee therefore cannot declare the application inadmissible on that ground (service-public.gouv.fr).

From the moment you file (page F134):

• you are entered on the FICP (national register of personal credit repayment incidents);
• you receive a certificate of filing; the committee has 3 months from that date to rule on admissibility;
• you keep paying your everyday expenses and your loans, and you must not take out any new credit;
• if the vente forcée (forced sale) of your home has been ordered, you can ask for the adjudication (auction sale), and therefore the eviction, to be postponed.

What changes for the home once the application is admissible

Seizures suspended. Admissibility entails the suspension and prohibition of enforcement proceedings against your assets (art. L722-2), for 2 years at most, until the measures are adopted (art. L722-3).

Auction sale. In a saisie immobilière (seizure of property), only the juge de la saisie immobilière (property seizure judge), on referral from the committee, can postpone the auction date (art. L722-4). Serious grounds must be put forward and proved (service-public.gouv.fr, page F31604).

Eviction. If eviction has been ordered, the committee can ask the juge des contentieux de la protection (consumer protection judge) to suspend it provisionally (page F31604).

Repayments frozen. It is forbidden to pay any debt other than a maintenance debt that arose before the suspension (art. L722-5). In practice, you stop repaying your mortgage, except for the mortgage insurance, and you may not give away or sell your assets without permission (page F34642).

Agreed plan or imposed measures

Where there is property, the committee first seeks a plan conventionnel (agreed repayment plan) negotiated with the creditors; without property, it moves straight to imposed measures (pages F34642 and F16982). The plan may require you to take certain steps, such as moving home if the rent is disproportionate, or forbid steps that would worsen your insolvency.

The imposed measures (art. L733-1):

1. rescheduling the debts over 7 years at most, or over half the remaining term of current loans;
2. allocating payments to capital first;
3. reducing the rate, which may not exceed the taux de l’intérêt légal (statutory interest rate);
4. suspending the enforceability of non-maintenance debts for 2 years at most.

The exception for the main residence. The total duration of the measures “may not exceed seven years” (our translation). It can be exceeded for loans that financed the main residence where this avoids its sale, or where the measures allow all the debts to be repaid without selling the home (art. L733-3).

If the home is sold. In the event of a forced sale of the main home, or a private sale intended to avoid a property seizure, the committee may, at your request and by a special reasoned decision, reduce the portion of the mortgages still owing (art. L733-4; page F1947). This measure can be combined with rescheduling and, with your agreement, a partial write-off of debts.

Personal recovery: sale and write-off

The committee may also direct the application towards personal recovery, depending on whether or not your assets have a market value (page F1946).

Sources: service-public.gouv.fr, pages F16978 and F34463.

The write-off does not cover debts paid by an individual guarantor, maintenance debts, fines and certain debts linked to criminal convictions (pages F16978 and F34463). The judge may also close the proceedings without a sale if liquidation can be avoided, by adopting a plan.

How long do you stay on the register?

Source: service-public.gouv.fr, page F17608. Being on the register does not in principle prevent you from obtaining credit, but lenders consult it (page F17608).

Which professional to consult

For the application itself, a social worker, for example at a point conseil budget (free budget advice centre), can help you (page F134). If the mortgaged home is sold, the mortgage is released through the notaire (notary), who submits the deed of mainlevée (release) to the service de la publicité foncière (land registration office) (service-public.gouv.fr): see our guide on mainlevée d’hypothèque (mortgage release). During the proceedings, you must not take out any new credit (page F134); a courtier en crédit (mortgage broker) will only be useful for a later project.