Natália Fioravanti Salvadori
Lawyer at Marcos Martins Advogados
Federal Law No. 14,181/2021, known as the Over-indebtedness Law, recently came into force, amending the Consumer Protection Code with the aim of benefiting consumers who are unable to pay the installments on their loans and credit cards in general.
The legal change came after the Central Bank identified that 7.2 million Brazilians are in a situation of risky indebtedness, committing more than 50% of their income to debt.
In short, the new law has determined that banks and lenders have greater responsibility when verifying consumers’ financial conditions, granting loans only if they do not compromise more than 30% of their income. There is also a duty to provide clear and prominent information about the conditions of the intended transactions.
The most important change is the possibility of renegotiations in situations of over-indebtedness, by summoning consumer protection agencies or judges, with the suspension of collection processes and the enforceability of credits, which can be paid within 5 years, after signing a single agreement to pay debts owed to various creditors.
The law has also brought significant benefits in terms of avoiding indebtedness, by prohibiting harassment and pressure when selling products and services, especially in the case of those considered hypervulnerable, such as the elderly.
In this way, the new law aims to remove the situation of indebtedness, as well as guaranteeing the possibility of a new life for over-indebted people, by making it easier to renegotiate debts en bloc, avoiding the decree of civil insolvency and preventing the consumer from being kept on the list of defaulters.
Want to know more? Get in touch with our lawyers. Marcos Martins Advogados is aware of the latest developments in order to provide our clients with appropriate and effective advice.
