Over-indebtedness: how to renegotiate debts in Brazil
Brazilian Law 14.181/2021 lets consumers combine their debts into a plan of up to 5 years while keeping a minimum to live on. Who can apply and how it works.
Sidnei Pedro Dias
9/27/20263 min read
When the combined installments start eating up the money for rent, food and medicine, a person may be over-indebted. Since 2021, the Brazilian Consumer Code has specific rules for this: the consumer brings all debts together and proposes a single payment plan of up to 5 years, without giving up what is needed to live.
What the law calls over-indebtedness
It is the clear inability of an individual acting in good faith to pay all consumer debts without compromising the "existential minimum" (art. 54-A, § 1, of the Consumer Code, added by Law 14.181/2021). It covers loans, credit cards, installment purchases and ongoing services.
Who can apply
Individuals only. The law does not protect debts incurred through fraud or bad faith, contracts signed with the intent not to pay, or purchases of high-value luxury goods and services (art. 54-A, § 3).
Debts left out of the plan
Real estate financing, rural credit and loans secured by collateral in rem are not included (art. 104-A, § 1). Debts that do not arise from consumer relations, such as taxes and child support, follow their own rules.
How it works, step by step
- Assessment: list all debts, income and basic household expenses.
- Renegotiation request: filed in court. Consumer protection agencies, such as Procon, may also run the conciliation phase (art. 104-C).
- Hearing with all creditors: the consumer proposes a plan of up to 5 years, preserving the existential minimum (art. 104-A).
- Absent creditor: if a creditor fails to appear without justification, its claim is suspended, late-payment charges stop and it may be bound by the plan (art. 104-A, § 2).
- No agreement: at the consumer's request, the judge opens an over-indebtedness proceeding to review the contracts and set a court-ordered plan (art. 104-B).
What about the existential minimum?
The amount that must be left for a person to live on is set by federal decree at R$ 600 per month (Decrees 11.150/2022 and 11.567/2023). In April 2026, Brazil's Supreme Court (STF) ruled on ADPFs 1005, 1006 and 1097. Unanimously, it ordered the National Monetary Council to review these parameters every year based on technical studies. By majority, it held that payroll loan installments cannot eat into the existential minimum.
For retirees and public servants this matters: payroll deductions now count when assessing how much is really left at the end of the month.
Helpful documents
- contracts and statements for every debt;
- proof of income;
- fixed bills: rent, water, electricity, school and medicine;
- payroll loan statement, for retirees and public servants.
A plan with checked numbers is what gives an agreement a chance. A proposal the consumer cannot keep usually brings the debt back to square one.
SPD Advocacia handles over-indebtedness cases throughout Brazil with digital service. Learn more in consumer law or message us on WhatsApp (62) 98184-3257.
Updated September 2026. Informational content, in line with Brazilian Bar (OAB) rules (Provimento 205/2021). Each case needs its own analysis, and we do not promise results.