It is common that when you cannot pay your bills, you say you are in debt. It’s okay, but not entirely. Everyone is in debt at one time or another, if you have a debt to someone, you are in debt. Which is perfectly normal up to a point.
The real problem arises when the inflows of money are not enough to pay your current bills, and when these, therefore accumulate, we speak of over-indebtedness.
I am accumulating unpaid invoices, what will happen exactly?
The accumulation of debts can have several consequences. An overdue invoice will first be reminded, then if it is still not paid, it could be prosecuted by means of a payment order, or taken up by a debt collection agency such as for example Intrum Justitia or Debitors Managment.
What if I have lawsuits?
After a few reminders, if the creditor decides to sue you, which happens in 99.9% of cases, the prosecution office in your region will send you a payment order. You will then have 20 days to settle this claim or object after which the creditor may request a requisition to continue the prosecution.
Once the requisition to continue the prosecution has been received and taken into account by the prosecution office, you will then be convened for a study of your financial situation which will determine whether or not you are seizable.
From there, one of two observations will apply:
There is a salary entry:
Based on the calculation of the subsistence minimum, any excess budget will be taken from you at source, therefore from your employer if you are employed to reimburse your creditors. Your goods can also be seized, here is an exhaustive list of what is or cannot be seized.
What is seizable:
- Income (salary, unemployment, self-employed income)
- Annuities from the 2nd and 3rd pillar
- Real estate
- Goods with a value greater than the estimated debt reimbursement costs (car, jewelry, paintings, etc.).
What is elusive:
- AVS / AI annuities
- Additional services
- Family allowances
- Benefits in the event of illness / accident
- Indispensable items reserved for personal use (clothing, furniture, etc.)
- Objects essential to the person in question as well as to his family (except luxury car for example)
There cannot be a salary entry:
Your lawsuit will then turn into an “act of want of property”.
When the act of default of goods is drawn up, the interest on this claim stops and even if you are not garnishable, the debt will remain valid for a period of you 20 years, after this period the claim will be expired.
However, a creditor can revive a lawsuit on the basis of an act of default of goods, and if the latter again leads to the issuance of an act of default of property, the period of validity will then be extended for an additional 20 years.
In addition, in the event that you return to better fortune during this period, the prosecution office may reassess your situation to determine whether a seizure is now possible.
If you are wondering how the prosecution knows that you have returned to a better fortune, it is the creditors who can revive an assessment of your financial situation at any time.
What is a collection agency?
Your creditor is not obliged to sue you, he can also decide to assign your debt to a collection agency, either at low cost, or because they regularly mandate this type of collection agency to deal with of their litigation. In concrete terms, the advantage for a creditor of using such an agency is to save time and money.
To find out more about collection agencies, their fees and costs, click here.
Do you have debts?
No worries, you are no longer alone, and you have the possibility of speaking to professionals, who will be able to accompany you throughout your deleveraging process.
It is important to get help in case of debt, and not to be left alone in front of your arrears.
The pressure from the creditors is too heavy in addition to all the other things that you have to manage apart from your bills.
We are here to help you, and accompany you, and this without any judgment and with encouragement.