Redemption of over-indebtedness credit.

Redemption of over-indebtedness credit.

Your debt is very high, your financial difficulties are accumulating, and you are looking for a solution? The purchase of credits can be adapted to your situation, even with a very high debt ratio. Be careful however when you switch to a situation of over-indebtedness, it is no longer possible to act with a restructuring. How to request a grouping with a high debt? Here are our tips.

What is the maximum debt to obtain a loan buy-back?

What is the maximum debt to obtain a loan buy-back?

The basis of any request for debt restructuring is the debt ratio. The debt ratio is very easily obtained by dividing your expenses by your income. Accumulate all of your current fixed charges. These include your outstanding loans (car loan, consumer credit, mortgage) but also the rents you pay or pensions you pay.

Do the same with your income. Accumulate your net wages, your annuities, pensions, aids, and other allowances. If you have made a rental investment, add the rents received to your income. Likewise, with all the benefits, you can derive from your self-employed activities. Once these two sums are obtained, divide your expenses by your income, and you have your debt ratio.

Most banking organizations use the so-called “33% debt” rule. Thus, it is customary to say that the weight of your expenses should not exceed one third (33%) of your total income. If all of your expenses (including your credits) reach 40% or 50% of your income, or even more, then you have a significant debt ratio. At what threshold do we speak of too high a debt ratio?

It all depends on your income and in particular on your remaining living. Two people who have a debt ratio of 50% will not be in the same situation depending on their income. If the monthly income is 1000 $, then the remainder is low, only 500 $. For a person with the same debt ratio but whose income is $ 3,000 per month, the rest of the living is more comfortable ($ 1,500).

Know that it is possible to request a loan buyout with a high debt ratio, beyond the 100% mark even, and with a small income! Be careful, however, not to be declared in a situation of over-indebtedness.

Over-indebtedness, blocking situation for a loan buy-back

Over-indebtedness, blocking situation for a loan buy-back

We talk about a situation of over-indebtedness if you can no longer manage to honor your monthly loan payments and settle your debts. There are no question of payment incidents from time to time, or small account maintenance issues. Over-indebtedness refers to the fact that you can no longer meet your credits and debts, in a sustainable manner. This situation can arise due to too many accumulated credits, or following a decrease in your resources (job loss, separation, etc.).

You can file an over-indebtedness file with the Banque de France if your personal charges and debts can no longer be settled. However, as soon as your file is submitted and an over-indebtedness commission takes charge of your situation, you can no longer make a request.

Indeed, no financial organization can restructure your finances if you are declared in a state of over-indebtedness. If you think that regrouping can help you get back into the green, then make your request to the teams before submitting a file to the regional branches of the Banque de France.

Redemption of credits or over-indebtedness file?

The important thing is that you find a solution to get out of your financial difficulties, and find a new breath. Does this new start involve consolidating your loans or filing an over-indebtedness file?

It all depends on the nature of your debts, your professional situation or the composition of your household. The best strategy? Don’t be alone with your problems. Contact the experts at who will give you a quick answer on the feasibility of your file. You will know if your high debt can be solved by a grouping of loans or not, thanks to a first feasibility response in 24 hours.