Credit repurchase for the unemployed

Credit repurchase for the unemployed

The fact is that an unemployed person offers absolutely no guarantee of the sustainability of income from time-limited unemployment benefits.

So the only way for an unemployed person to get his credits back is to find among a member of his close family who would agree to take out in his own name a personal loan of the necessary amount, at his own risk and obviously provided that he has the corresponding borrowing capacity.

It is therefore exclusively a matter of family and trust. On the side of banks and credit institutions, there is nothing to hope for, unless …

There is a case where you can be unemployed and a borrower

It is when you live in a couple, that you are married, civil partnership or common-law, and that the other has sufficient income, therefore a debt capacity allowing him to obtain alone the grouping of credits, unimportant besides by which of the two these were subscribed. In this case, one of the two who is unemployed may nevertheless be a co-borrower.

Please note: the debt ratio will, therefore, be determined by the regular and perennial income of the only borrower who is inactivity, but the charges, whether for joint housing or alimony paid by the unemployed. , will be charged in full. Thus, even in common-law relationships, one of the two who works cannot claim to be accommodated by the one who is unemployed to benefit from the practice of “notional rent” when its amount is less than that of the real rent of the couple’s accommodation.

Can a joint and several guarantees be envisaged?

The bank of the unemployed person, depending on the history of their relationship, in particular, could perhaps accept a joint and several guarantees, provided that it is a close family member (relative or child). For the latter, this solution is more satisfactory than taking out the restructuring loan itself since it will not be a borrower and the bank will be able to sue the latter when it becomes solvent again.

On the other hand, no specialized credit institution accepts joint and several guarantees for the repurchase of credit. There are (very few) who accept a mortgage guarantee, but it is not at all the same thing because if the latter can see his property pledged sold in the event of default by the borrower, it is not a substitute for him in front of the lender who must first prosecute him.

The mortgage bond serves as a financial guarantee for the restructuring loan, but the latter will only be granted on the basis of the borrower’s debt capacity, which must, therefore, have sufficient regular and long-term income, in other words not being in the unemployment.

Prevention is better than cure

The only way for an unemployed person to benefit from a loan repurchase is to have obtained it before losing his job and, more precisely, before he is subject to a dismissal procedure.

Obviously, it is not a question of acting in the manner of an “insider trading”, ie of acting when one learns sufficiently in advance that one is going to do the subject to an individual or collective dismissal procedure.

Even without this “complicity” and without a crystal ball, one can feel such a risk. However, if the company that employs you is experiencing proven economic difficulties, it is to be feared that the credit institution that you will request for your credit consolidation will be informed during its research.

Before these difficulties arise, if you work in an industry which is likely to be impacted by the economic crisis or a development of the markets which is unfavorable to it, it may be prudent to consider buying back credit for anticipate a possible drop in income following a job loss or a reduction in working time, for example and adapt your credit repayment charge to this new situation.

If the feared risk does not materialize or that having materialized, you find a job thereafter, you can always make a quote for grouping your loans or even make partial repayments.

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