Do you have outstanding debts, debts or monthly payments that are difficult to repay? Have you thought about buying back credit, which stabilizes your accounts? It is possible to buy back credit with a wage garnishment. We explain what it involves and the procedure to follow.
Why a credit redemption?
When an establishment buys back your credits from your various creditors, we speak of credit redemption. The financial operation consists of grouping all your credits into one in order to reduce your monthly payments as well as your debt ratio. Instead of making several payments with different organizations, you only have one with a single creditor.
Your monthly loan payments will be reduced because the new credit will lengthen the repayment period or the overall rate will be lower than the previous ones.
However, the longer the repayment period, the greater the interest. A repurchase of credit often goes hand in hand with an increase in the total cost of credit. Note, it is possible (and even advisable) to renegotiate your loan in order to reduce the cost of buying back credit.
What is a wage garnishment?
Wage garnishment affects many French households. In the case of indebtedness, the creditor is reimbursed directly by deducting from the debtor’s salary. This is a withholding tax on income. This comes after a court decision. Generally, wage garnishment is claimed by a bank, a landlord or the tax authorities.
In the case of a repurchase of credit, the borrower must give his agreement. After receiving an official request, the employer deducts the payment from the salary and transfers the monthly installment of the loan to the credit institution each month. The seizure cannot operate on the entire salary of the indebted person. It must imperatively remain the equivalent of an RSA. The judge in charge of the case calculates the amount to be seized according to two criteria: the amount of the person’s salary and his family situation.
A repurchase of credit with seizure of wages
The repurchase of credit makes it possible to restructure your cash flow. Late rent does not interfere with a credit redemption request. On the contrary, late payments can be integrated into the loan consolidation. In this case, the bank will reimburse the rent to the owner.
The tax authorities can also set up a wage garnishment in order to recover taxes due. This procedure of the Public Treasury is compatible with the establishment of a repurchase of credit. Again, tax delays can be integrated into the redemption of the credit. In this case, it is the bank that will settle your debts with public finances.
Have you taken out a home loan, a car loan or any other consumer loan, and you can no longer pay your monthly payments? In the event of non-payment, the creditor can initiate legal proceedings against you and request a garnishment of wages. When signing the loan, you set the monthly payments and it is imperative to honor your commitments. By not repaying your monthly payments, you risk being filed by the Banque de France. This is very negative in the case of a loan consolidation request.
Obtain a loan buy-back in the event of a difficult situation
To be granted a loan buy-back, you have to put the odds on your side. The first thing to do is to provide a very complete file. This must include all the information on your financial and personal situation. The goal is to prove your stability. A credit repurchase broker requires the last three bank statements. This allows him to study financial flows. The credit redemption institution must be reassured about the individual’s ability to control his budget on a daily basis. Rejections of direct debits must be considered as exceptional and not regular facts.
Read also: Credit redemption: list of documents to provide