In these two cases, decided on the same day, individuals benefited from an over-indebtedness procedure, under which their debts were written off after a rescheduling period of 24 months. The question arose as to whether this debt write-off was conditional on the sale of the individuals’ real estate. The two Courts of Appeal gave different solutions.
The Cour de cassation’s solution
In a series of well-reasoned rulings, the French Supreme Court (Cour de cassation) affirmed the subordination of debt write-off to the sale of real estate, with an exception if the real estate constitutes the debtor’s principal residence and the debtor would find it manifestly impossible to meet the cost of any rehousing.
Legal foundations
These decisions are based on :
- Article 2284 of the Civil Code according to which anyone who has made a personal commitment is bound to fulfill his commitment on all his movable and immovable property ;
- Articles L.733-1, L.733-3, L.733-4, L.733-7, L.733-13 of the French Consumer Code, setting out the measures available under the overindebtedness procedure.
