All outstanding payments are not equal
Some claims are easier to recover than others. This will depend on the personal situation of the debtor, the sum and the type of claim. We will see that for each situation of unpaid, there are solutions, more or less effective.
In the past, there were other methods that were far more muscular to cover an unpaid bill.
- Unpaid bill
- Wooden check
- Unpaid rent
- Family debt, loan between friends and debt recognition
- Recovery of alimony
- Recovery of over-indebtedness
- Recovery: lawsuit and lawyer
- Collection company
- Lawyer or collection company?
Different steps taken by a bank
The collection is very framed in France. We had already discussed this in our article on the forfeiture of the term, with the different steps taken by a bank in the event of failure to pay a monthly installment of credit. We are far from the usurers of the past, who, to be reimbursed, did not hesitate to use “big arms”. This practice is obviously prohibited today.
In the different situations that we will study in this article, there are always steps, common to all, to respect:
- First contact with the debtor: is it an oversight, an error? Give it gives it a chance to pay. We are in the friendly recovery. This is not really an unpaid, we will call it ” late payment “.
- This delay becomes a persistent unpaid: we take the first legal measures, with an “official” mail. Here, we are in litigation, the relationship with the debtor is necessarily degraded. This letter explains that if the debtor does not pay, he risks prosecution.
- There is nothing to do: we seize the Justice (often long and complicated) or a collection society.
- Last step: we hope that the person is solvent to have a chance to be reimbursed: seizure of wages, seizure of property
Let’s take a look at the differences according to the unpaid amount involved.
Macron law) for small claims (less than 2000 euros), but the debtor must cooperate.
- Go through a collection company, who will decide to go to litigation or not.
An unpaid invoice, of a small amount, is always difficult to recover. On small amounts, it can be considered that it is not necessary to activate a judicial procedure, preferring to wait for amicable recovery to be done. It is better to wait sometimes a few months before recovering 100 euros of invoice rather than immediately go through the court. But if we do not want or we can not wait so long, while avoiding the court or collection society, which can recover only a fraction of the debt?
Not to mention the “big arms”, which is anyway an illegal solution (you know, threaten the debtor to break his legs if he does not pay ), we can however make it clear to the recalcitrant customer that we really wants to get his money back, by occupying his premises for example and get a personal meeting with the offending client.
Many people who owe money do not hesitate to go directly to the client’s office and stay there until they get their money back! It’s called the nerve, a quality necessary to survive in this world of sharks The problem is the line between harassment and the right cause, slander and the right.
For those who do not have this “nerve”, or who can not use a collection company, there is really only the court left. With a little luck, the payment order obtained in court may suffice.
To go further on this topic, read “judicial recovery”. The parable of the rich man. Rembrandt’s painting. get robbed of the Bank of France (article eKonomia) after
Note: we can save the first bailiff fees by taking charge of making the “request for injunction to pay”, especially if we can not afford to advance the money to pay bailiffs. See the Public Service website for more information.
Personally, I would prefer to spare myself this task, I have better things to do than to run after the customers: the ushers do that much better than me. It should not be forgotten that a badly initiated procedure can turn against the creditor.
Solidarity Fund for Housing, Housing Action). SOS Unpaid rent: 0805 160 075. Set up by ANIL (National Agency for Housing Information), this toll-free number provides valuable assistance. In case of trouble, calling them is the first thing to do.
The unpaid rent is also the time to think about the rental guarantee, and to inform the person or the organization who has taken surety of the default of payment of the tenant.
Notice of default for unpaid rent
This is the first step in proving to the court in the event of a dispute that an attempt has been made to recover the rent, but it is not mandatory. As previously mentioned, a reminder letter is usually sent three weeks after the normally scheduled rental date. If the tenant ostrich, he does not answer, it goes into litigation and the formal notice, which should be sent (always registered with acknowledgment of receipt) one month after the non-payment of rent. The formal notice is a reminder of the obligations of the tenant, and the risks incurred in case of non-payment.
We always start from the principle that we want to keep the tenant, and not expel him: we are talking here only about the recovery of the debt. For eviction, it is necessary to refer to the clauses of the lease agreement: in this case, no need to make a reminder, we go directly to the next step, the “command to pay”.
Bailiff and unpaid rent
The tenant has not paid yet: the owner can then have recourse to the bailiffs who will issue to the tenant and his surety an order to pay, obtained from the clerk for the rental debts below 4000 euros, or from the trial court above. The tenant has one month to challenge in court.
If despite everything, the rent is still not paid: the injunction is transformed at the request of the owner in command to pay. When the tenant receives the command to pay, he normally has two months to pay his rent late. Two months to find help from welfare agencies.
If after two months no solution has been found, the owner can appeal to the district court. The tenant must be informed of his summary summons by a bailiff. At the end of this hearing, the judge can note the cancellation of the lease and order the eviction of the tenant, or grant him a period of payment of his rental debt. After receiving the eviction notice, the tenant has two months to go, except during the winter break (from November 1 to March 31). It should not be forgotten that in all cases, the tenant can still appeal (tribunal de grande instance), and so drag his deportation a little more and the payment of rents which can take months, even in cases the most extreme, years.
In case of insurance “unpaid rents”, the insurer pays late rents to the owner and turns against the tenant. This insurance is expensive, but is very reassuring for the owner. Nevertheless, it is important to know that most of the time, the insurance will not pay until the third or fourth month of the first report of the unpaid. If the owner is in financial difficulty, it is very long.
Boost for homeowners who want legal help, but do not spend money on a lawyer: check out the eviction procedure on RequestJustice.com.
Namely: unpaid rents represent about 2% of all rents collected in France. This is something rare, but when it happens, we saw it is a real obstacle course to recover his money, especially if the tenant is in bad faith!
We can never say it enough: in a loan between individuals, even between people of confidence, it is better to take precautions!
The first precaution: do not wait for years before asking to be reimbursed: after 5 years, there is prescription!
“The personal or movable actions are prescribed by 5 years from the day when the holder of a right knew or ought to have known the facts allowing him to exercise it. “(Article 2224 of the Civil Code).
The second precaution: to establish a debt recognition at least under private signature. Above, we put the amount and terms of repayment (duration, interest or not ).
No need to give in to emotional blackmail: “Do not you trust me? “. If this money you lend to you will fail you later, the relationship to trust has no place. Let’s never forget that husbands or women cuckolds, it exists, let’s never forget that family quarrels are legion. If it makes you think, the friend who needs money will not get angry with you because you make him sign a paper. As long as he needs your money, he will not get angry!
An important thing to know: if one lends 1500 euros or more, the establishment of the debt recognition is mandatory. This for tax reasons: no one wants this credit granted to the boyfriend or the family member to be confused with a donation. It’s easy to convince your friend, your brother, your son or any other family member to sign a debt acknowledgment.
Read: the family loan
Recognition of debt at the notary
For the large sums of money lent, I strongly advise the notary. By large amounts of money, we are talking about enough money to buy a car, for example. We will not pay the notary because we lent 100 euros to his brother!
This notarized debt recognition is easy to recover: no need to go to court, just contact a bailiff to recover his money. This is the last resort to have against the family member who does not want to pay or that friend who is no longer one.
Recognition of private debt
Faced with the argument of not paying a notary, the best thing to do is to have the debtor (who owes money) handwritten an acknowledgment of the debt, which he signs. There is no charge, it is a simple paper where it is written that Mr. So-and-so must pay such a sum to Madame Chose, to repay on such date. It must contain:
- The amount of money lent, written in letters and numbers (as on a check)
- The surname, first name and date of birth of the debtor, but also that of the creditor
- The date of establishment of the debt recognition
- The debtor’s signature
The disadvantage of this debt recognition is the greater difficulty in recovering its money in the event of a problem. Indeed, it is necessary to go through a court decision before.
No debt recognition?
Without a signed document, without proof, it is the word of one against that of the other, which is practically impossible to unravel legally. Especially if the payment of money has been made in cash! As we know, family lending is a much too common cause of disputes, unfortunately. If the loan was made between individuals, without any acknowledgment of debt with a cash payment, the only way to recover his money against a recalcitrant debtor is unfortunately the force. Difficult to use against a friend, a member of his family, and even more if the tough guy is him. In all civility, say that it is better to take his trouble in patience.
On the other hand, if the money has been paid by check or bank transfer, this element can be taken into account by the court. In all cases (notarized or not), if the loan is greater than 760 euros, the debtor must declare it to taxes. He must be able to justify the source of this money in case of control. If the loan has been made without interest, a simple loan agreement declaration is sufficient. If the loan provides interest, you must also complete Form 2561.
fraudulently organizes its insolvency. To address this situation, which is too hard for many divorced parents to endure, Parias, the Unpaid Pension Recovery Agency, was created in January 2017.
This agency greatly simplifies the lives of single parents: from the first unpaid, it is reported to the CAF or the MSA (the two organizations are responsible for the Parias), which can then pay the ASF (Family Support Allowance) as an advance on unpaid alimony. Parias will then turn against the former spouse, with the power to make payroll seizures or directly to the bank account to collect the support.
To contact them, the Parias has of course a website, but also a toll-free number: 0821 22 22 22.
Personal recovery procedure is very difficult, if not impossible. Having a hope of one day recovering the money that an over-indebted person owes is directly related to the nature of the debt and the decision of the over-indebtedness commission or the enforcement judge.
- The commission decides on a conventional recovery plan. It defines the repayment terms of the creditors: duration, amount. Here, the creditor can hope to be reimbursed someday, even if far away. It is a plan that is negotiated between the commission and the various creditors, who have their say.
- The commission decides on a moratorium: for two years, the over-indebted person does not repay anything. It is given time to recover its ability to repay, at least priority debts.
- After two years, if the person is still over-indebted and hopeless, his debts will be erased. To repay the creditors, we will sell almost all the assets of the debt, except the “vital” goods and those needed to work. If there is nothing left to pay the creditor, the creditor can forget his debt (and nothing is planned to compensate him).
If the debt is professional, food or criminal, it is still 100% valid and priority over all others, even with an over-indebted person.
Attention: this applies to the debts at the time of the deposit of the file of over-indebtedness. If the over-indebted person has continued to accumulate debts, these new debts will have to be repaid.
Priority of debts
In order to determine the chances of recovery, we must know the priority of our debt in relation to other debts of the person over-indebted. Priority is established primarily according to the difficulties that a non-payment may cause to the creditor. To put it simply, the more the creditor is in trouble if he does not receive the money, the more he has priority.
The assets of the over-indebted person are auctioned off to repay their debts.
Three large families of debts are thus absolutely priority and excluded from the assessment of over-indebtedness by the commission.
- Professional debts
- Food debts: canteen, alimony, compensatory allowance
- Criminal debts: these are the contraventions or the damages which the debtor owes to his possible victims.
These debts are therefore to be paid whatever happens.
All others can be erased, in whole or in part. It is up to the judge to decide what the priority debts will be, knowing that the debts related to housing come first.
The claim of the lessor, in the event of unpaid rent, passes before the other non priority debts. The landlord is therefore assured of being among the first to be reimbursed upon the liquidation of the debtor’s property. This in principle allows the tenant to keep his home.
The mortgage is also a priority over other debts: the goal here is always to allow the person over-indebted to keep his home, and to ask an effort to the bank. Nevertheless, it is still possible to sell the housing if it is proven that the person over-indebted will never repay.
Other debts can be classified as follows:
- Tax debt. The payment of taxes, taxes, can be arranged and delayed.
- Expenses and current expenses: EDF, gas, telephone
- Social debt: social security, retirement, CAF, URSSAF
- Bank debt (consumer credit, agios ).
If we must recover the money from an unpaid bill by an over-indebted person, we must take his trouble in patience: it is up to the judge to decide the priority of our claim, but it will always come after a professional debt, food, criminal or rental. It is necessary to count in years from the first statement of unpaid until the reception, if it arrives, of the payment.
Privileged creditor, unsecured creditor?
Having a ” surety ” on its claim allows a creditor to be reimbursed in priority. By security, we speak of the mortgage of real estate or pledge for example. Are also privileged creditors employees of a company to which the boss owes money: we will pay the employees before all other debts of the company.
A unsecured creditor is a simple creditor without security. He will have no priority over other creditors over the selling price of the debtor’s property.
We must not hesitate to defend ourselves against abusive recoveries if we have the misfortune to be the debtor or rather, the harassed person.
Two solutions are proposed by collection companies
- Assignment of receivables: The collection company repurchases receivables and manages to recover the amounts. This is only possible if the volume of unpaid bills is large enough. The collection companies buy back at a price that is well below the value of the claim, but we are certain to have recovered a little bit of money on something that was thought to be lost forever anyway.
- We do not sell the debts: the company pays for what it covers. We recover a little more money with this solution, but we must wait for recovery to be made if one day the claim is paid.
Even though collection companies are expensive, it is important to remember that they are relieving businesses and craftspeople of the heavy burden of having to run after the bad paying customer. This lost time also has a cost, which should not be neglected.
- Loans between individuals, attention danger!
- How to live without a bank