Lawyer - Credit law

Credit is a ubiquitous financial tool in everyday life, whether used to finance consumer goods, carry out personal projects or acquire property. While credit offers opportunities, it also involves the borrower and any guarantors in a contractual relationship that is often complex and subject to dense legislation. Given the technical nature of these contracts and the obligations they entail, it is essential to be well informed and advised at every stage.

Our law firm, with its wealth of experience in banking and financial law, puts its expertise at your service to help you. Whether it's before you sign an offer to understand all its implications, when you take it out to ensure it's compliant, or in the event of repayment difficulties or a dispute with a credit institution, our team is at your side to defend your interests.

Understanding your commitments: the credit offer and contract

Taking out a loan is an important legal act that deserves particular attention. Financial institutions and bankers are bound by strict obligations to provide information so that borrowers can make a commitment in full knowledge of the facts.

Pre-contractual information: an essential stage

Before you commit yourself, the lender must provide you with clear and comprehensive information about the features of the proposed loan. Offers can sometimes seem complex, particularly when it comes to calculating the Annual Percentage Rate (APR), identifying all ancillary charges or the scope of borrower's insurance. Transparency is a legal requirement, particularly under the French Consumer Code.

Our firm can help you decipher European Standardised Information Sheets (FISE) and credit offers. We can analyse for you the clarity of the information provided, the completeness of the compulsory information and the compliance of the offer with the regulations in force, so that you can compare the proposals and make an informed decision.

Credit agreement clauses: vigilance required

The credit agreement formalises your commitments and those of the lender. It is crucial to understand each clause, particularly those relating to the duration of the loan, repayment terms, the guarantees required (deposit, mortgage) or the consequences of a payment incident. Some clauses may be abusive or illegal, requiring careful examination to secure your position.

We carefully examine the terms of your credit agreement. Our role is to alert you to sensitive clauses, explain their legal scope and, if necessary, challenge those that are contrary to the law or that are clearly abusive to your detriment.

The Annual Percentage Rate (APR): a key indicator

The TEG is a central element of the credit offer. It represents the total cost of the credit to the borrower, expressed as an annual percentage of the total amount of credit. The calculation of the TEG must include all the compulsory charges for obtaining the credit. Unfortunately, errors in calculation or the omission of certain charges from the APR base are common and can significantly increase the real cost of your loan. An irregularity in this respect can have serious consequences.

Our firm has recognised expertise in checking that the overall effective rate is correct. If an error is found, the law provides for specific penalties, including forfeiture of the right to interest for the lender. We can help you assert your rights and get your situation rectified, including before the relevant court.

Protection for borrowers and guarantors

Legislation on credit, particularly consumer law, aims to protect borrowers against the risk of over-indebtedness and to regulate the commitments of guarantors.

The lender's duty to warn and the borrower's solvency

Credit institutions are obliged to check the borrower's ability to repay before granting a loan. They must also ensure that the proposed loan is suited to the borrower's financial situation and warn against the risks of excessive debt that the transaction could entail. Failure to comply with these obligations may render the lender liable to civil action.

If you believe that you have been granted credit without a serious analysis of your financial situation or without being warned of the risks, our firm can analyse your case and determine whether the banker can be held liable.

Guarantees: a regulated commitment

A guarantee is a commitment with far-reaching consequences for the person who enters into it (the guarantor). The law imposes strict formal requirements for the validity of this instrument, in particular the need for precise handwritten details. The guarantor must also be informed annually by the creditor of changes in the guaranteed debt. A guarantee that is manifestly disproportionate to the guarantor's assets and income at the time it is entered into may be challenged. A lawyer specialising in banking law can advise you on the scope of this article of the Civil Code.

We advise guarantors on the nature and extent of their commitment. In the event of a dispute, we check that the guarantee is valid, that the creditor has complied with its obligation to provide information and that the commitment is proportionate. We defend the guarantor's rights when payment is called in, including on appeal.

Registration in the Register of Personal Credit Repayment Incidents (FICP)

A serious payment incident can lead to you being registered on the FICP, which is managed by the Banque de France. This registration has major consequences, notably limiting access to credit. The law strictly regulates the conditions and duration of this registration.

If you feel that you have been wrongly or improperly registered on the FICP, our firm can help you to dispute the matter and apply to have the registration removed from the FICP, either by the institution responsible for the registration or directly by the Banque de France. This support can be crucial in restoring your financial capacity.

The performance and risks of the credit agreement

The life of a credit agreement can be marked by various events, whether the borrower exercises a right or difficulties arise. A good understanding of credit law is therefore essential.

Right of withdrawal and provision of funds

After accepting a consumer credit offer, borrowers have a cooling-off period (usually 14 days) during which they can withdraw from their commitment without having to justify their decision or pay any penalties. There are also specific rules governing the period within which the lender must make the funds available.

We will inform you of the precise conditions for exercising your right of withdrawal. In the event of a dispute concerning the release of funds or compliance with deadlines, we will intervene to assert your rights.

Early repayment: an option for the borrower

Barring a few exceptions, borrowers always have the option of repaying all or part of their loan early. In certain cases, however, the lender may charge an early repayment penalty, the calculation of which is limited by law.

Our firm can check the compliance of the clauses in your contract relating to early repayment and ensure that any compensation claimed by the lender complies with the legal ceilings.

Payment incidents and overindebtedness

Temporary or longer-term financial difficulties can lead to payment incidents. When faced with such a situation, it is important to react quickly to avoid increasing your indebtedness and the creditor initiating collection procedures (accelerated payment, seizure). Solutions exist, ranging from amicable negotiation to referral to the debt commission to draw up an over-indebtedness plan.

If you are experiencing repayment difficulties, we can help you analyse your situation, negotiate with your creditors and find amicable solutions (payment extensions, debt restructuring). If you are in serious debt, we can help you to put together an application to the debt commission and, if necessary, represent you before the judge. Our help can make all the difference.

Focus on certain types of credit and their specific features

Credit law covers a wide variety of contracts. While the general principles of borrower protection apply, certain categories of credit are governed by specific rules.

Affected consumer credit and link with the main contract

Earmarked credit is credit intended exclusively to finance the purchase of a specific good or service (e.g. car purchase, building work). There is a strong legal interdependence between the credit agreement and the main contract it finances. This means that if the sales or service contract is cancelled or terminated, the credit agreement is automatically cancelled or terminated. This rule is an important protection for the consumer.

If you have a dispute concerning goods or services financed on credit (non-delivery, lack of conformity, hidden defect), our firm can advise you on the remedies available and their consequences for the credit agreement. This issue is linked to consumer law.

Revolving credit: vigilance and rights

Revolving credit is a credit facility that gives you access to a sum of money that can be reused as you make repayments. This type of credit, often combined with a card, carries a high risk of indebtedness because of its generally high interest rates and its permanent nature. The law imposes stricter information obligations on the lender and strict conditions on the renewal of these contracts.

We analyse your revolving credit agreements to check that they comply with the law, particularly as regards information on interest rates, repayment terms and renewals. In the event of a dispute, we can help you assert your rights.

Bank overdraft and overdraft authorisation

A bank overdraft is an overdraft facility that allows you to overdraw your account up to a certain amount and for a set period of time. When an authorised overdraft is used or exceeded, interest is charged (agios) and sometimes significant fees. Banking regulations govern these practices.

If you have a disagreement with your bank about the conditions for using your overdraft, the calculation of interest or charges, our firm can advise you and help you find a solution.

Credit law litigation: defending your interests

When the dialogue with the credit institution breaks down or your rights are not respected, legal action may be necessary. Managing a case in banking law requires specialised expertise.

Prescription and foreclosure: crucial deadlines

Credit law is characterised by specific time limits for taking legal action. The lender has a foreclosure period (generally two years from the date of the first payment incident that has not been rectified) within which to recover its debt. Once this period has elapsed, the action is inadmissible. For their part, borrowers also have a limitation period in which to challenge the validity of their contract or the performance of the lender's obligations.
Analysing the time limits for foreclosure and prescription is an essential technical aspect of defending your interests. Our firm, which is a member of the Paris Bar, examines these issues rigorously to identify the relevant means of defence or action in your case.

Penalties in the event of default by the lender

The law provides for various penalties if the lender fails to meet its obligations. The most common is total or partial forfeiture of the right to interest, which can considerably reduce the amount of the debt. In some cases, certain clauses, or even the contract itself, may be declared null and void. The borrower may also be entitled to damages to compensate for the loss suffered. Liability action against the banker is also possible.

Our firm identifies any breaches by the financial institution of its legal or contractual obligations, assesses the penalties incurred and provides you with legal representation to assert all your rights, whether in a court of law or, for disputes under commercial law, in a commercial court.