IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Households Debt Restructuring: Evidence from the French Experience

  • Fraisse, H.
  • Frouté, P.

France has a long and unique experience of public intervention in household debt restructuring. When facing financial distress, households can file a case to a “households’ over-indebtedness commission” (HOC). These HOCs either grant a delay of payment or impose a partial reimbursement of the secured or unsecured debt. This paper evaluates the ex post impact of this decision on the creditors’ recovery rate, the household’s re-default rate and the net benefit of the treatment, defined as the amount recovered by the creditors minus the public cost of treatment of the file. The random allocation of the households over file managers with different pro-household friendlinesses is used to correct for endogeneity. Sixty percent of households are ordered to repay part of their debt. Over a two-year horizon, the possibility to grant a delay of payment decreases the average redefault rate and the average repayment rate respectively from 13 to 7 percentage points and from 14 to 12 percentage points. The net benefit over a small fraction of low distressed households offsets the loss observed over a large fraction of more distressed households. Our results highlight a substantial impact of the severity of the case manager.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Banque de France in its series Working papers with number 404.

in new window

Length: 36 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:bfr:banfra:404
Contact details of provider: Postal: Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:bfr:banfra:404. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael brassart)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.