Background to the programme
Each year, about 4,500 cases are submitted to the debt commission in Paris, including 44% of resubmissions. Life changing accidents (unemployment, illness, separation ...) and the crisis are aggravating the situations of people who are already struggling. Faced with poorly informed debtors and incomplete support, Crédit Municipal de Paris (CMP), a credit and welfare institution, has launched an experiment with a budgetary support service in 2012 in Paris in partnership with the Bank of France and the City of Paris: Point Solutions Surendettement (Solution Ideas on Over Indebtedness (P2S)). Originally intended for debtors who have submitted an application with the excessive debt commission of the Bank of France or are recognised as being in serious debt, since 2016 the service has also catered to Parisians with an excessive loan to find an alternative to submitting a debt application, as part of a preventative mindset.
Objectives of the programme
- Avoid the submission and resubmission of files on excessive debt and propose interventions with creditors
- Optimise the budgets of people in financial difficulties (budget advice and raise awareness of access to rights) and teach them about the relationship with the bank
- Offer technical support to support staff (professionals or associative workers in social action)
* ACTION BEFORE THE SUBMISSION OF A FILE ON OVER-INDEBTEDNESS:
- Debt mediation: evaluate the opportunity to renegotiate the debt. Analysis of contract terms, bring insurance in to the situation, information on eligibility for debt consolidation loans and links with P2S partners if necessary (conciliators, creditors and social landlords ...).
- Individual budget education: analysis of the financial situation (including related debts) and personalised advice on budget management.
- Collective budget education: Finance & Educational workshops facilitated around questions from the room. Case studies and examples of good reflexes (relationship with the bank, money management, operation of banks, rights ...). 2 hour sessions, once per month for a dozen people, available to all beneficiaries of the P2S
* ACTIONS RELATED TO SUBMITTING A FILE ON OVERINDEBTEDNESS:
- Help putting the file together: to establish an inventory of debts, examine the validity of debts, information on the procedure. Take account of debts which the debt commission won’t deal with (fines ...) and interventions with these creditors.
- Help during the process: register as part of the P2S as an advisor to the file so as to be included in the procedure and to receive copies of all the letters from the Commission, monitoring all the steps to prepare the implementation of the commission’s decision
* TERMS OF SUPPORT:
- 1 volunteer representative throughout the duration of the support, trained in the over indebtedness procedure, in the relationship between helping and listening, in the Parisian social milieu ...
- Contact: Phone platform prior to a meeting face-to-face in the local CMP
- 1st appointment: budget meeting, proposal for support with the administrative procedures if necessary (help with additional health payments, supplementary allowances from the municipalities, social tariffs ...) or direction towards a more qualified partner (legal and psychological dimension, solidarity grocery ...)
- Monitoring: a minimum of one phone appointment every 3 months, if a 2nd appointment is not offered after the first one. Average of 5.5 interviews per beneficiary (face-to-face meetings, by telephone interviews or email exchange).
Quantitative and qualitative results from the implemented actions
- Action by P2S allows the risk of resubmission to be cut by a third (9% of resubmissions among the beneficiaries of P2S, 16% if you take into account people who have dropped out of the support process, versus 44% - national average)
- ORIGINS OF APPLICATIONS: 50% after the debt commission procedure, 50% earlier on (done so on advice, no communication towards the general public).
- PROFILE OF PEOPLE RECEIVED: on average 51 years old downstream - 47 years old upstream; 70% of people are alone with one or more dependent children; 50% are employed; 20% unemployed, 15% retired; less than 10% are receiving social security benefits
- DISTRIBUTION OF ACTIVITIES: intervention with creditors (setting up payments as part of a repayment or debt plan); listening, financial analysis (budget optimisation, access to rights); advice on the relationship with the bank; explanation of the over-indebtedness procedure or assistance putting the file together; representative in the proceedings or referrals to other organisations
- ANNUAL AVERAGES: 650 new people supported in 2015
- RESULTS AFTER 3 YEARS OF TESTS: 3,700 calls handled, over 10,500 interviews for the benefit of 1,900 people monitored individually
The P2S is the only measure on indebtedness:
- which the Bank of France recommends as a support by sending a letter inviting Parisians who have reached the end of the over indebtedness procedure to contact the CMP (or to reconnect with their representative if the person has already been monitored). 1 in 7 people who received this letter actually called P2S.
- managed by a public institution welcoming people residing in Paris whatever the state of their financial situation.
Partnership(s) developed in the context of the programme
Finances & Pédagogie, Social housing landlords, Mediation Information Mediation Point Services (PIMMS), of Family Allowance Funds (CAF), banks (BNP Personal Finance, Banque Postale ...), an association of psychologists, solidarity grocery stores, Abbé Pierre Foundation (problems related to housing), legal conciliators if necessary, the courts ...
Difficulties and/or obstacles encountered during the programme’s implementation :
* Information & Communication:
> Specific to P2S: preconceptions concerning relations with the Bank of France ("probationary" role of P2S, people who want to reverse the decision ...) volunteers have poor knowledge of the make-up of associations so as to be able to guide people; make the measure better known among the general public
> In general: difficult to talk about money problems; difficult to take the decision of the debt commission on board (10% of P2S seekers cannot say what decision they received during the first hearing)
- No typical over indebtedness profile: every case is individual
- Sometimes frank opposition from people who can’t resign themselves to the fact they are in debt
- Related to the excessive debt procedure: incompatibility with the status of auto-entrepreneurs; connected debts (criminal debts or alimony) are not taken into account; treatment is too "administrative" leaving out the causes of over-indebtedness
Solutions used to overcome the difficulties and/or obstacles :
- In 2014, opening of P2S to people who have not yet made use of the debt commission
- Creation in 2016 of a department for Budget Advice Info Point (PCB) at the CMP
- Regular questionnaires for beneficiaries
- Media Visibility: Toutsurmesfinances.com, Le Figaro, TF1 ...
- Newsletter for professionals
Suggestions for future improvement :
* In late 2015 a qualitative study was conducted by a consultancy firm on 3 samples (people who have benefited from the P2S, people who haven’t resorted to it, stakeholders). Areas for improvement were identified:
- Escalation of the support which requires the practical implementation of the advice given and to be in position over time;
- Accuracy of the response on technical advice (including legal) and complex situations;
- Intervention earlier on in the indebtedness process;
- Development of communication with partners to strengthen the core of P2S
Summary of factors responsible for the programme’s success :
- Its network: multiple partnerships to meet specific needs, a special relationship with the Banque de France, credit organisations and social landlords (identifying vulnerable people with the help of prescribers to avoid the submission of an over-indebtedness file)
- Personal monitoring of people, without a time limit and comprehensive support (upstream and downstream of the over-indebtedness procedure)
- Treatment of difficulties related to debtors: unpaid rent, judicial proceedings (separation proceedings, maintenance payments...), and access to rights (supplementary health payments, supplementary allowance given by the municipalities, social tariffs ...)
- Confidentiality, listening, free, independence (of any commercial activity), technical and legal expertise
- Reactivity: act quickly with vulnerable customers and adapt to the debtor’s constraints (a short delay before the implementation of their plan)
- Volunteers: initial training of 2 months and support from the team of employees (including people knowledgeable in CESF training)
- Downplay the situation: bright individual offices, presentation of small guides to visitors, humorous displays, decoration of the premises...
To know more
- Office hours: Monday to Friday from 9am to 13pm and from 14h to 18h
- Report on TF1: http://lci.tf1.fr/economie/social/grace-au-point-solution-surendettement-500-personnes-ont-pu-8715974.html
- See Resolis report on the initiative of Finances & Pédagogie