Unforeseen circumstances may be such that you can no longer settle and deal with the monthly payments of your credit: loss of employment, death, illness, etc. According to the CEB, in June 2017, 545,399 people (representing a decrease of 0.8% compared to June 2016) showed non-payment on their loans. This non-payment, also known as unpaid credit, can lead to a serious default and serious consequences. And you are entitled to ask “What happens if I can not repay my credit?” Find out below what can happen if you do not pay your credit.
1. You will be blacklisted by the CEB’s Central Bank for Personal Credits (CCP)
If you do not pay your credit, you are likely to be blacklisted by the CCP. The latter, a tool against over-indebtedness, identifies bad payers. When you do not pay / over your credit, the lender must inform the Central of non-payment within eight business days of its challenge, according to the criteria set by law. Failure to pay must be more than three months.
When you are registered on this list, you will stay there for a maximum of ten years if you do not regulate your situation. Nevertheless, if you repay all of your debt, this period is reduced to one year after the regularization date.
2. Your lender will have different options available to him
at. He can call on your guarantees
The lender, in case of non payment of the credit, can proceed to the seizure of your various guarantees according to the modalities defined by the law:
- Your deposit : after sending a formal notice by registered letter, if you still have not paid the payment of your credit, the lender may call on your surety and order him to pay. For this, you must not have paid at least two deadlines or at least 20% of the total amount to be repaid or the last deadline.
- Your salary : the lender can make a seizure on your salary. For this, you must have consented to a contract assignment distinct from that of the main loan agreement. The lender must first notify you by registered letter of his intention to implement the seizure. Then follows a procedure after which the lender can seize a portion of your salary. Usually, he informs your employer, who will pay him the money. Nevertheless, you can challenge this before the justice of the peace and / or ask him for payment delays.
- Your mortgage : If you do not pay back your mortgage, the property on which your loan was made can also be seized.
b. He may demand the repayment of the loan
If you face a non-payment of your credit, the lender, after reminders, may terminate your contract and request the repayment of the latter. For this, your default mortgage payment or other credit must be equal to two deadlines or 20% of the total amount to be repaid. The praetor must first send you a warning by registered letter within 3 months of the non-payment. You will have one month to pay your debt. If you do not do this, you may terminate the credit agreement and will require full repayment of the following amounts:
- the remaining capital
- unpaid interest
- interest on late repayment credit consumption
- a penalty calculated according to the contract and which may not exceed 10% of the outstanding capital on the first installment of 7,500 euros and 5% on the portion of the outstanding capital that would be greater than 7,500 euros.
c. It will be able to take back the object of the loan in the contracts of consumer credit
In certain types of consumer credit agreements, if you do not pay your monthly payments and are thus late in payment, the lender may seize the property of the outstanding credit agreement. Indeed some contracts may contain a retention of title clause. The latter allows the lender to recover at any time the property whose purchase was financed by a loan. For example, if you subscribed to a consumer credit to buy a car, and you do not pay your monthly payments, it can be resumed. However, if you have already repaid at least 40% of the value of the car, the lender must first notify you by putting you on notice by sending a registered letter. He must have your consent or authorization from the justice of the peace. It is therefore important to think carefully before you pay a loan, and to assess beforehand your ability to repay the loan. You undertake to repay several deadlines that will weigh on your monthly budget, so be sure of the importance of the project to finance.
d. He may accept an amicable solution
You can also try to find an amicable solution with your lender, but he will surely ask you for late penalties.
As well as: All you need to know about receivables
3. You can be sued
As part of the options available to the lender, after formal notice and / or conciliation attempts, the latter may sue you for the repayment of the outstanding credit. You can therefore be ordered to pay the balance of the loan and interest on late payments. This judgment must be notified to you by bailiff. If you still do not pay your debts, he may have a seizure on your salary or property.
4. You will be less likely to get a new loan
As mentioned earlier, when you face an unpaid credit, you may find yourself on the blacklist of the CCP. Even though each lender defines its own loan acceptance policy, it is obliged to consult the blacklist before granting the loan. If you are on the list, then the lender can not grant you credit under any circumstances;
If you can not repay your loan, talk about it and try to find solutions amicably with your lender. You can also seek help from Ombudsman or other organizations to provide you with the best advice.