How to assess a debt renegotiation offer

Receiving a renegotiation offer is a relief, but not every offer is a good deal. A "90% discount" may apply to an inflated amount, and paying in installments can cost more than it seems. Before accepting, it is worth measuring the offer against what the debt is really worth today. The rules cited here are the Brazilian ones.

Step 1: find out how much you really owe

• Ask the creditor for the debt statement: original amount, the date the delay began, penalty, late interest, correction and other charges, each one separate.
• Check Registrato. For debts with banks and finance companies, Registrato (opens in a new tab), a Central Bank service, shows the credit operations registered in your name.
• Check that the amounts add up. The guide on late fees and interest shows how each part is calculated and what the limits are.

Step 2: measure the real discount

The real discount is calculated on the already-updated debt, not on the original amount: real discount = (updated debt − offer) ÷ updated debt. This number is known as the haircut.

Here is an example. An original debt of R$ 5,000.00, 90 days late, with a 2% penalty and late interest of 1% a month, is now R$ 5,250.00. A settlement offer of R$ 4,200.00 gives a real discount of 20%, or R$ 1,050.00 less. An offer of R$ 5,250.00 or more has no discount at all, even if it is advertised as a "special condition".

Step 3: in full or in installments

Add up all the installments and compare the total with the updated debt. Paying in 12 installments of R$ 450.00 adds up to R$ 5,400.00, more than the R$ 5,250.00 of the updated debt: in practice, the deal charges interest.

That does not make installments bad. It can be worth it if the installment fits the budget and the deal solves a bigger problem, such as a restriction that keeps you from working or from financing something important. What is not worth it is signing without knowing the cost. Ask for the total amount, the interest rate and the CET of the deal.

Step 4: agree on everything in writing

Before paying the first installment, confirm in writing:

• the total amount and the way of payment;
• the due dates and what happens if a deal installment is late;
• that the deal settles the whole debt, not just part of it;
• the removal of your name from delinquent-debtor registries after payment.

After full payment, it is up to the creditor to have the debt record removed from the delinquent-debtor registry within five business days (Súmula 548 of the Superior Court of Justice). Keep the receipt for every payment.

When your debts are more than you can pay

Law 14,181/2021 (opens in a new tab) added to the Consumer Protection Code a procedure for people who cannot pay all their consumer debts without compromising their own livelihood. In broad terms, the person can ask for a conciliation hearing with the creditors and propose a payment plan lasting up to five years, preserving the so-called "existential minimum". The request can be made at Procon, at the Public Defender's Office or in court. The details depend on the case, and it is worth seeking guidance from those bodies.

Beware of scams

• Be wary of anyone who promises to "clean your name" in exchange for an advance fee.
• Check the payee of the payment slip: it should be the creditor or a collection company the creditor authorized. If in doubt, confirm through an official channel, such as the app, the website or the phone number in your contract.
• Never share passwords or verification codes during a negotiation.
• To complain about a company, consumidor.gov.br (opens in a new tab) is a free public service.

How to use the renegotiation tool

In renegotiation, enter the overdue debt (amount, days, penalty and late interest) and the creditor's settlement offer. Finasst calculates the updated debt and the real discount, and tells you in one sentence whether the offer is really a discount.