The Credither Guider had not processed the information yet. A few weeks ago, the Francia bank delivered a study summarizing the number of over-indebtedness cases filed with the Francia bank in 2016.
Two conclusions stand out. First, the number of files is down 10.6% year on year, 194 194 units. Secondly, the share of consumer credit tends to decrease.
What is over-indebtedness?
First, a definition. Over-indebtedness refers to the inability of a household to repay loans and debts. Households facing these difficulties may file an over-indebtedness file with a departmental commission. These organizations depend on the Francia bank.
Less and less consumer credit
According to the figures of the Francia bank, the share of consumer loans in the overall indebtedness of households fell from 58.2% in 2011 to 39.3% in 2016. In details :
19.3% of the files in 2016 did not include any consumer credit, compared to 10.5% in 2011;
the average indebtedness relating to consumer credit also tends to fall to € 20,619 (a decrease of € 4,600 in 5 years);
by type of loan, the share of personal loans and revolving loans represent respectively 17% and 21.3% in the household debt, against 22.7% and 34.6% in 2011.
Real estate debt is progressing…
Debts related to a home loan follow the opposite path. And very quickly: from 22.6% in 2011, it rose to 35.3% in 2016.
The average debt is in the same trend and reached € 107,987, an increase of € 12,735 in 5 years.
Results that might seem disturbing, but need to be relativized. Why ? Because, according to the Francia bank, they are linked to the ” legislative reforms of 2010 and 2013 that allow homeowners and first time buyers to benefit from the debt overhang procedure “.
… as well as current account arrears (and other debts)
What does the Francia bank mean by “current account arrears ” ? It’s simply housing, energy and transportation. As for “other debts “, they include, for example, family debts or sureties.
The impact of this dual category is not negligible. It represents 23.6% of total indebtedness in 2016, compared to 17% in 2011. This is an increase of nearly 38% in 5 years. Sign of its significant impact, the current account arrears affect 82.1% of over-indebtedness situations (75.6% in 2011).
If one does not take into account the real estate debts, the average indebtedness by folder (including descends to 27 481 €, or 1 024 € less than in 2011.
And the profile of over-indebted households?
First observation: people living alone (single, separated, divorced or widowed) represent 66.1% of over-indebted households with no dependents (53.9%). In terms of age, the 45-54 age group is ” majority ” (26.8%).
Renters represent a large majority of the files filed (76.3% in 2016), far ahead of ” homeowners ” (8.3%) and ” owners who have completed paying their credit ” (3.1%).
In terms of repayment capacity, more than one out of two cases (52.1% in 2016, a stable level compared to 2011) ” remains characterized by a lack of repayment capacity “.
Similarly, 80.8% of new over-indebtedness cases are marked by ” modest or non-existent repayment capacity “, that is, under 450 €.
On the income side, the survey highlights that 51.1% of over-indebted households receive resources below the SMIC and 14% of resources below the RSA. As for employment, the files filed concern mostly employees and workers (57.5% together). We can also note a high proportion of over-indebted unemployed (28.7% in 2016, against 25.6% in 2011).
People with no activity (due to disability, long-term sick leave, etc.) or no profession represent 12.4% and 10.1% respectively.
The redemption of credit, a possible solution
Your debt is increasing and you want to stop its progress? You may not need to enter the over-indebtedness commission near you. You may indeed be able to redeem credit.
Quésako? This is an operation whereby a financial institution buys your credits and debts to offer you another loan. In return, you pay only one monthly payment. And by paying only one term, you reduce your debt ratio. Comparing credit redemptions can be the solution to regain new investment capacity.