Termination of a revolving credit

by Sharon Garcia

 

We all know, subscribe to a contract, whatever it is, it is usually quite simple. To separate from it, it is much more complicated. Between the deadlines to be respected, the specific conditions, the tacit renewals, and what do I know yet, it is sometimes very difficult to terminate a contract. Fortunately, the laws have evolved a little in our good old France. So now, canceling a revolving credit has become very simple.

Act Châtel.

Act Châtel.

Indeed, since August 1, 2005 and the implementation of the Châtel law, it is possible to cancel a revolving credit at any time. In fact, you must of course have paid all the amounts borrowed, as well as any penalties provided for in the contract. Here are the two most common cases.

Termination on the anniversary date.

Termination on the anniversary date.

Since the Lagarde laws of 2012, the revolving credit has changed. Establishments and subscribers now enter into a contract on a one-year basis, renewable by tacit agreement on each anniversary date. However, 3 months before the anniversary date, the financing organization from which you have signed your contract must send you a letter in which it must stipulate the conditions of the contract for the coming year. This information must contain three elements, including the terms of termination.

In fact, you have up to 20 days before the anniversary date to send a mail to the establishment in question. In this mail, you simply specify that you want to see your revolving credit stop, and you accompany your mail with a check of the balance, if any.

You can do it because you do not want it anymore or because you do not accept the new conditions.

Termination due to the non-use of the revolving credit.

In case you do not use your reserve of money, know that it is suspended after a year of inactivity. However, it may be reactivated in the following year. In fact, you have to wait two full years without any action on the revolving credit so that it is terminated de facto. If, despite this time without use, you still have sums to settle, you must pay the balance at the same time.

Other case.

Other case.

There is one last case of termination. This is the revolving credit to which you have subscribed but which you do not wish to activate. If you are still within 14 days of the subscription, you have the right to request the termination of the contract. Formerly limited to seven days, this period of termination was extended by Law No. 2010-737 of July 1, 2010. Do not hesitate to use it when you retract.

In short, and to sum it up, it is possible to cancel your revolving credit when you wish, as long as the reserve is complete and you have no money left to repay. However, a non-employee revolving credit generates no fees and always leaves the possibility of an appreciable pay-out in case of a hard blow.

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