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The Over-Indebtedness Law has helped many Brazilians who found themselves mired in debt in recent years.
And, it is a fact that after the pandemic, it is difficult to find someone who has not had an encounter (or more than one) with default.
But what is the Over-Indebtedness Law? Who can use it? What debts are covered? Can PJ use it?
All these questions will be answered throughout the content below.
So, if you want to understand everything about the subject and perhaps get out of debt trouble, just keep reading!
The situation of over-indebtedness: why does it happen?
Have you ever stopped to think how difficult it can be to get out of a debt situation?
This is worth considering, especially when we talk about people who unexpectedly get into debt.
Whether it is an emergency that requires the credit card use, or even the loss of income that made it impossible to pay a loan, this is a situation that can happen to anyone.
However, you've probably heard several "experts" claim that only those who want to stay in debt can stay in debt; after all, it's just a matter of negotiating. Is that really true?
Considering the exorbitant number of rates and interest applied in the default sector in Brazil, negotiating a debt may not be so simple.
And, even when you manage to negotiate, the interest applied to installments can make payment difficult.
So many difficulties along the way can lead the consumer to a very delicate situation: Over-indebtedness.
Over-indebtedness is the name given to the situation in which the amount of an individual's debts makes it impossible to pay them without compromising their minimum subsistence income.
Simply put, it's when debts are so high that there's no way to pay them without compromising the debtor's minimum income.
This situation makes negotiations very difficult and can lead the consumer to a complicated situation.
After all, let's suppose that the individual has a huge debt, and the creditor of the debt goes to court demanding payment.
In this situation, how can he pay if it will make him go through financial difficulties?
In other countries, this citizen would probably be ordered to pay anyway, even if it left him in a precarious situation.
But, in Brazil we have the Consumer Protection Code, and now the Over-indebtedness Law, which aims to ensure that this does not happen.
Next we will understand how this law works.
What is the Over-indebtedness Law?
In the previous topic we saw that the situation of Over-indebtedness can generate many losses for the debtor.
This is because the amount of the debt is so high that it is practically impossible for the holder to pay and clear his name.
With that, the same has credit denied, in addition to suffering from uninterrupted charges, that everything be paid.
But if you can't pay, what can you do?
With this situation in mind, the Over-Indebtedness Law was created, which aims to regulate and find ways to help citizens who find themselves in this conflict.
It is important to say that the Over-indebtedness Law (L. 14,181) works together with the Consumer Protection Code.
This means that its purpose is to complement and ensure that the CDC's provisions for consumer protection in the event of default are complied with.
As we well know, a large part of the debts acquired do not occur in bad faith, but rather due to financial difficulties.
Therefore, it would not be appropriate to punish all debtors by making it difficult to pay off their debt.
But still, it is not uncommon for banks to make it difficult or refuse to renegotiate debts.
Therefore, the Over-Indebtedness Law provides some provisions and solutions for the payment of debts that are difficult to negotiate.
However, it is worth mentioning that not all debts can benefit from this law.
This is because, to use it, the citizen must meet the criteria for Over-indebtedness, in addition to meeting other basic criteria.
We'll understand these criteria better later, but for now, what we need to know is that this law serves to assist in the payment and renegotiation of more complex debts.
What debts can be included in the Over-indebtedness Law?
We previously saw that the Over-indebtedness Law aims to help citizens who face a situation of Over-indebtedness.
As we have seen, being in this situation is very difficult, as the debtor is completely unable to obtain credit, in addition to suffering from charges that will never cease, given that paying the debt is almost impossible.
The Over-Indebtedness Law was created to help with this issue, but it is worth mentioning that not all debts can benefit from it.
This is because debts of low value or that can be easily renegotiated are not covered by the law.
Furthermore, debts arising from purchases of luxury items or services are also not eligible for the law.
The same applies to debts related to alimony, taxes, rural and housing credit.
In general, debts of the following types may fall under the law:
- Credit card;
- Loans;
- Utility bills (water, electricity, internet, etc.);
- Other debts with financial institutions.
What changes with the Over-indebtedness Law?
Throughout the text, we understood that the Over-Indebtedness Law aims to ensure that the debtor can negotiate his debts.
Furthermore, the law also aims to restore the dignity of consumers, who suffer from social exclusion due to high debt.
But what really interests many people is the part about renegotiating debts.
After all, what is the difference between negotiating debt and the Over-Indebtedness Law?
The first thing that changes is the possibility of negotiation, because many banks don't even accept negotiating with over-indebted individuals.
When using the law, this is not possible, so the bank is obliged to allow negotiations to the customer.
Furthermore, the law also guarantees unified payment: all your debts are brought together in a single transaction.
This way, you don't have to worry about paying separate installments, as everything is combined into one payment.
Another difference is the payment conditions, as interest rates are reduced and there is the possibility of paying the debt in installments.
Finally, we can highlight the guarantee that the negotiation does not compromise the minimum necessary to guarantee the life of the holder.
Therefore, we can understand that the law can be a relief and even a "light at the end of the tunnel" for those who find themselves mired in debt.
How to adhere to the law?
Finally, after everything we've seen, you certainly already have a good understanding of the Over-indebtedness Law.
With that, all that remains is to talk about the use of the law itself, that is, how to adhere to it.
The first thing we must understand is that legal entities cannot use this law.
This means that business debts do not benefit from the Over-Indebtedness Law, as it is only intended for "natural person consumers".
Furthermore, to use the law you obviously need to be in a situation of over-indebtedness.
It is worth mentioning that the text of the law does not specifically determine what this situation would be.
However, it is known that the debt must compromise the possibility of payment.
Furthermore, the debt cannot have been incurred through bad faith practices.
This means that using a credit card without any intention of paying it back, or taking out loans without any intention of paying them back are situations that do not allow the use of the law.
Regarding the use of the law itself, it is necessary to request judicial renegotiation of debts, based on the law.
Therefore, it is recommended that you seek a lawyer to assist you.
The request will result in a conciliation hearing with the creditors, that is, the companies to which you owe money.
At this hearing, you will have to present a payment plan with a maximum term of 5 (five) years.
It's worth mentioning that you should group together all your debts in order to find a single payment, which can be made in full or in installments.
During the hearing, everything will be defined so that all parties involved can present their points.
However, it is worth mentioning that the use of the law favors the debtor, since creditors cannot hinder negotiation.
So, if everything goes well, you will get a court decision that will allow you to pay your debts more easily.
This is certainly excellent news for those who find themselves desperate in the midst of a situation of over-indebtedness!
