surendettement

Surendettement is a condition in which an individual or household is unable to meet debt obligations because the burden of debt exceeds their income and regular expenses. It typically involves a combination of loans, credit cards, rent or mortgage arrears, and other forms of consumer credit. Surendettement is more than a temporary cash shortage; it can lead to persistent financial distress, legal actions, loss of assets, or housing instability if not addressed.

Causes and risk factors include easy access to consumer credit, rising living costs, stagnant or falling real income, unemployment or underemployment, illness or disability, changes in family circumstances, and insufficient financial literacy or budgeting. When several debts accumulate and repayment capacity erodes, households may enter a situation where ongoing obligations become unsustainable.

In many countries, including France, surendettement is handled through formal public mechanisms designed to prevent destitution and preserve essential housing and basic needs. Affected individuals can initiate a process with a designated public body or commission that assesses their financial situation. If approved, a plan may be proposed to restructure debts, consolidate obligations, extend payment terms, or provide partial relief. The objective is to restore repayment capacity while balancing creditors’ interests. In some systems, inclusion on credit-incident registers can influence access to new borrowing during the process.

Outcomes of such interventions vary, but aim to reduce immediate pressure, prevent eviction or foreclosure, and promote longer-term financial recovery. Preventive measures, including budget counseling, financial education, and access to social support or microcredit, are typically encouraged to reduce the risk of recurrence.