New French law aims to crack down on excessive debt

The number of French people crippled by excessive debt is set to be slashed, French Finance Minister Christine Lagarde claimed after a new law came into effect 1 November. The measure, adopted in June, aims to help families pay back their debts and should benefit some 120,000 people.

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“It is important as it means that one struggling couple out of every six is going to be able to return to a normal life and bounce back,” said Minister of Economic Affairs Christine Lagarde in an interview with French dailyLe Parisien.

“Those who have had their dossiers accepted by the commission on excessive debt will no longer have to respond to the demands of creditors,” said the minister.

The new law has been keenly awaited following the sharp rise in the number of people dealing with serious debt problems. It aims to better regulate commercial practices regarding credit but also to improve the management of excessive debt.

Those who have been blacklisted will also be able to clear their names within five instead of 10 years if a repayment plan is put in place and respected.

The law will also ensure that individuals are protected from having their possessions repossessed or their bank account suspended.

According to previous government figures, some nine million French people spend on credit and 2,6 million are in financial difficulty as a result. The number of people in excessive debt has increased by 15 per cent between 2008 and 2009.