The Brazilian Over-indebtedness Law (Lei do Superendividamento do Consumidor No. 14.181/2021) completed one year of effectiveness in July 2022. The purpose of this law is to include provisions on prevention and treatment of over-indebted consumers in the Consumer Defense Code.
This law covers “any financial commitments undertaken as a result of a consumer relationship, including credit operations, installment purchases, and services provided on an ongoing basis”, according to article 54-A, paragraph one.
Understand the main points of the Consumer Over-indebtedness Law
Basically, besides increasing the list of mandatory information that the supplier of credit, products or services must provide to the consumer, the Law of Over-indebtedness prohibited some of the suppliers’ conducts regarding credit offers.
But the main contribution of this law was the creation of a judicial procedure for the conciliation of over-indebted consumers. This request is very similar to the petition for judicial rehabilitation. Based on it, the judge may initiate a debt renegotiation process, in which the consumer will present a proposal for a payment plan with a maximum term of 05 (five) years, preserving the existential minimum.
Can debts in agribusiness be renegotiated under the Law of Over-indebtedness?
The Law of Over-indebtedness expressly excludes the possibility of renegotiation of debts arising from credit agreements with collateral, real estate financing and rural credit. This means that credits taken via rural credit bills (such as the CPR, CCR or CCB of rural credit) cannot be subject to reconciliation in over-indebtedness.
Learn about the debt negotiation alternatives for the rural producer
Since the Law of Over-indebtedness does not cover debts arising from rural financing, what alternatives are left for the individual rural producer who needs to renegotiate his debts?
The first option would be the renegotiation and restructuring of debts and assets with each creditor financial institution, on an individual basis.
The second is the judicial recovery of the individual rural producer, expressly allowed by the 2020 reform of the Judicial Recovery Law (Law 11.101/2005).
Finally, we cannot fail to mention the possibility of renegotiating debts through out-of-court reorganization. Since this is a renegotiation tool which negotiation occurs outside the Courts, it is more flexible and open. Depending on the specific case, it ends up being more attractive.
