Personal over-indebtedness, verification of debts and defense on merits

On November 23, 2023, the second civil chamber of the Court of Cassation was able to render two interesting decisions regarding the right to over-indebtedness contained in the consumer code. The first appeal concerns the date on which the cancellation of debts must be decided in the event of personal recovery without liquidation (to be published on Dalloz Actualités). The second concerns a question which is not regulated by the texts regarding the verification of claims. This is the one we are looking at today.

At the origin of the appeal, we find two natural persons whose request for the treatment of their financial situation was declared admissible. However, they file a dispute when the state of liabilities is notified to them by the over-indebtedness commission. They consider, in fact regarding a bank loan, that the lending company must be deprived of its right to interest. The local judge is contacted for the validity of the title of this debt as well as for the amount claimed by the bank. This declares the debtors admissible, in their dispute for the purposes of verification of the debt, despite the prescription raised by the banking establishment. He then deduced from the evidence that the forfeiture of the right to interest was incurred and that the company’s debt was therefore settled on this basis. The creditor bank appeals to the Court of Cassation, arguing that the judgment…