Top 5 Solutions for Anyone with Credit Problems

Experiencing difficulty repaying your loans is not uncommon. Whether due to an unforeseen event, a drop in income, or an accumulation of debt, fortunately, there are several solutions to respond effectively and prevent the situation from worsening. Here are the top 5 steps to consider first if you're having trouble repaying your loans.

1. Contact your bank or creditors quickly

The first thing to do in the event of difficulties is to contact your bank or the organization that granted you the loan. Explain your situation, request an appointment, and explore your options together. Financial institutions generally prefer to find an amicable solution rather than initiate debt collection proceedings. You can therefore negotiate a payment extension, a temporary reduction in monthly payments, or a suspension of the loan, depending on the terms of your contract.356.

2. Modulate or suspend monthly credit payments

Many loan agreements allow for the possibility of adjusting repayments, i.e., temporarily reducing the monthly payments (usually from 10 to 30% of the monthly payments), which extends the term of the loan but eases your budget in the short term. It is also sometimes possible to suspend repayment completely or partially for a few months, particularly in the event of job loss or an accident. Be careful, these solutions increase the total cost of the loan, but they help avoid non-payment and its consequences.356.

3. Consolidate your loans (credit redemption)

If you have several outstanding loans (real estate, consumer, auto, etc.), debt consolidation or loan consolidation can be an effective solution. A financial institution buys back all of your debts and offers you a new, single loan, with a reduced monthly payment adapted to your repayment capacity. This simplifies budget management, avoids over-indebtedness, and allows you to have a more comfortable living expenses.567.

4. Request a grace period from the court

If negotiations with the bank are unsuccessful, you can apply to the court to request a grace period. The judge can then suspend repayment of your loan for up to two years, without interest or late payment penalties. This solution is intended for people who are experiencing temporary financial difficulties and who will be able to resume payment of installments at the end of the grace period.2348.

5. File an over-indebtedness file with the Banque de France

As a last resort, if your difficulties are significant and long-lasting, filing an over-indebtedness application with the Banque de France allows you to freeze repayments, obtain a rescheduling or even a partial cancellation of your debts. This procedure is free, but it results in a record with the Banque de France and limits access to new credit for several years. It is intended for people who can no longer meet all of their debts, despite amicable solutions.1237.

To remember

• Don't let the situation escalate: the sooner you react, the more solutions you will have at your disposal.

• Read your loan agreements carefully to understand the development options provided.4.

• Do not hesitate to contact a budget advisor or a debt relief association to assist you in your efforts.4.

In case of credit problem, there is always a solution adapted to your situation. The most important thing is not to remain isolated and to act quickly.

Master Lecas, credit law attorney is at your disposal.