#2021-1192Reform of Security Rights Bill in France
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
The reform of security rights in France substantially changes the rules around guarantees, including personal and real security. It affects creditors and guarantors by introducing detailed provisions for both parties, modifying their obligations and rights in situations like debtor default. Businesses, creditors, and individuals involved in securing loans must understand these new rules to ensure compliance and mitigate risks.
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Key Changes
- Introduction of detailed rules for personal and real securities
- Modification of rights and obligations of creditors and guarantors
- Requirements for formal documentation in guarantees
Obligations
What this law requires
Professional creditors must provide written annual information to individual guarantors by March 31st each year, disclosing the principal amount, interest, and other accessoires remaining due as of December 31st of the previous year (Article 2302)
Professional creditors must inform individual guarantors of the primary debtor's default within one month of the first unresolved payment incident (Article 2303)
Individual guarantors must explicitly sign a written statement acknowledging their guarantor status, the debt amount in both words and figures, and any waiver of discussion or division benefits (Article 2297)
Professional creditors must warn individual guarantors when the primary debtor's commitment is unsuitable for the debtor's financial capacity; failure to do so results in loss of recourse against the guarantor for any harm suffered (Article 2299)
Guarantees subscribed by individuals must be express and cannot exceed the amount owed by the debtor or be contracted under more onerous conditions than the underlying obligation (Article 2294, 2296)