Helping People Out of Debt with by Implementing Borlo Law in France

Borlo Law is a unique mechanism set up under the French law with an intention to tackle the over indebtedness of the citizens of France. This mechanism was first set up in the year 1990 and was amended in the year 1995, 1998 and in 2003. This enactment constituted an administrative body known as House Hold Debt Commission to act as a conciliatory body between the debtor and the creditors. The law entrust judiciary to legalize the decisions or the recommendations proposed by the commission to start up with the personal recovery procedure.

The commission constituted under Borlo Act is administered by the Banque de France. The commission is entrusted with the task acting as a mediator between the debtor and the creditors and to encourage them to reach in an out of court settlement. The commission is also authorized by the Law to make recommendations to the judiciary when the mediation talks fail to reach in to an amicable settlement between the debtor and the creditors.

The responsibilities of the commission include helping the parties to frame repayment schedule and make recommendation for the magistrate for recovery of the personal properties of the debtor where the mediation fails to reach into an amicable settlement agreeable to both the parties. It is the responsibility of the commission to help the parties by framing a loan repayment schedule based on the income and the debts that the debtor owes to his creditors. Both the debtor and the creditors should be consulted by the commission while drafting repayment schedule for the debt. If agreed by both the parties the schedule drafted by the commission will be presented before the concerned magistrate to get approval from the judiciary. The schedule prepared to resolve the cases that involve severe indebtedness may contain recommendations for writing off of certain portions of the debts or the whole debt that the debtor owes to his creditors.

The commission constituted under the Borlo Law is authorized to make recommendations to the court if it feels that it is not practically possible for the debtor to repay the amount that he owes to his creditors. But the commission should obtain the consent of the debtor before it makes a recommendation for personal recovery to the court.

The cases that satisfy the definition of over indebtedness given in the French Consumer Code will only be admitted before household debt commission constituted under the Borlo Law. No cases that arising out of professional debts will be considered by the household commission.

On admitting an over indebtedness issue, the commission will inform both the creditor and debtor about the matter. The commission is also empowered by the Act to request the court before which an execution petition is pending to stay the matter until the commission decides over the issue.

It is the obligation of the debtor to provide to the commission a detailed report of the debts that he owes to his creditors. The statement submitted by the debtor should also contain all the details of his present earnings. The details of the spending of the debtor should also be there in the statement he files before the household debt commission. Then only the commission will be able to prepare a schedule that suits the earning and expenditure of the debtor. When preparing the schedule the commission will always give priority to the debts those debts that finance the purchase of the residence of the debtor. All the creditors who have advanced cash loan to the debtor will be treated as equals by the commissioner in the schedule. Once the schedule is prepared by the commissioner it will be given for the parties of the case for their consideration. If agreed by the parties, the same would be forwarded to the magistrate in order to obtain the consent of the judiciary.

Writen by Matthieu Laporte of aidesurendettement.com where you can get free information on Frais de dossier
and on other debt and credit matters.