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

Borlo Law known as Borlo Act in France constitutes as unique debt resolving mechanism known as household debt commission to help the persons who are no longer able to resolve their debts without the interference of authorities. This mechanism was first introduced in France in the year 1995 and subjected to two amendments in 1998 and 2003. The household debt commission constituted under the Act is empowered by the law to act as a conciliation agent in between the debtor and his creditors in the cases admitted by the commission.

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 commission constituted under the Borlo Law is entrusted with serious responsibilities to tackle the over indebtedness issues of individuals. Once the case of debtor has declared as admissible by the commission, the commission will draw up repayment schedule for the debtor after consulting both the creditors and the debtor. This schedule will be presented before the Magistrate taking up the case by the commission to get confirmation from the judiciary. The repayment schedule prepared for severe indebtedness may contain a moratorium. Sometimes the commission recommends writing off of the liabilities of the debtor wholly or partially.

If it is not possible for the debtor to repay the amount received from the creditors, commission will recommend personal recovery procedures with the consent of the debtor. Once the liquation process is over the debts in question will be completely cancelled.

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.

Both the creditor and the debtor should be informed by the commissioner once it admits a matter for its consideration. The commissioner is also empowered to request the court before which the debt matter is pending to stay the matter till it finally decides the matter.

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 Loi Borloo surendettement

and on other debt and credit matters.