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Insurance and over-indebtedness.

Insurance is not a debt like any other. Even in a situation of over-indebtedness, they continue to play a role, if we keep only those that really matter.

The insurance can contribute to a person’s over-indebtedness.

The insurance can contribute to a person

 

This is true, as for all other expenses. But, as in everything, there is insurance and insurance. Everything depends on what is insured: insurance against loss of employment or against unpaid rents can prevent the insured from finding himself in debt, time to find work or a tenant.

If over-indebtedness is unavoidable, current insurance will be handled by the debt commission on a case-by-case basis, sorting out what is useful and keeping what is not.

What guarantees to obtain a credit?

What guarantees to obtain a credit?

These insurances no longer serve much purpose after an actual over-indebtedness. Especially when you know that the most interesting insurance for someone at risk of over-indebtedness, insurance against job loss, often has very restrictive clauses:

  • You must be on a permanent contract, outside the trial period
  • Not having been dismissed for misconduct or resigning
  • It is generally necessary to keep one’s job at least 6 months after taking out insurance
  • The assumption of charge of monthly payments of credit generally intervenes only after 3 months of loss of the employment.

To summarize: this insurance, very expensive, is reserved only for those who have virtually no risk of losing their job, and who would find a new job after 3 months of unemployment. We do not recommend this insurance to anyone except those who know that their business will close in 7 months, and who have virtually no hope of finding a job soon after. But then, is it reasonable to make a credit under these conditions?

In over-indebtedness, we want to reduce costs as much as possible. Insurance against a death or disability on a consumer credit while undergoing a personal recovery procedure is almost a luxury.

Once over-indebted, it is better to use the money that one would have put in the insurance to be able to repay the credit, and to live, quite simply.

It is thus entirely possible to benefit from a provident insurance while one is over indebted, if the insurer accepts the situation of overindebtedness. The question is: Is the wealth protected by the provident insurance worth the candle, given the extra cost of insurance?

In principle, when you are in the process of personal recovery, we have nothing more to insure. In the case of home loans, loan insurance already covers death or disability cases. It therefore seems to us that it is not necessary to have provident insurance in the event of over-indebtedness. Once again, it’s better to pay off your debts unless you plan to do something irreparable!

Fight against over-indebtedness

  • Debt file, instructions for use
  • Clearing debts with personal recovery
  • Find a free lawyer
  • How to buy back a repurchase of credit
  • Insurance and over-indebtedness
  • To avoid the lapse of the term
  • All about overdraft fees
  • Payment incident: beginning of over-indebtedness

Market’s review

Market

In over-indebtedness, only compulsory insurance is kept

In case of submission of debt overdraft , certain insurance that provide for it automatically cease. This is often the case with voluntary consumer credit insurance. Other insurance is considered current expenses, such as electricity or telephone, and must be paid under penalty of termination of contract.

It is not the over-indebtedness that causes the termination of auto insurance, but the failure to pay its monthly payments. The over-indebtedness is thus the opportunity to put back all the insurances in course: renegotiate the obligatory insurances, to terminate the optional insurances.

In any case, in the event of an over-indebtedness plan, it is important not to stop paying compulsory insurance. A bad payer will be stuck at the insurer and will surely have to pay a lot more for a new insurance.

 





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