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On Monday (05), President Lula (PT) signed a Provisional Measure establishing a new government debt renegotiation program. The aim is to offer opportunities for people to pay off their debts and overcome their default status.
The program called “Financial Relief” was an electoral promise made by Lula during the 2022 elections. The intention is to allow low-income families to pay off their debts and regularize their status in the individual taxpayer registry. However, implementing the program took longer than expected by the economic team.
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The main reason for the delay was the development of an electronic system capable of making “Financial Relief” possible. This is because four distinct parties need to interact simultaneously: the government, creditors, people in default and, lastly, banks.
How to settle debts with “Financial Relief”?
It is important to understand that the government will not forgive Brazilians’ debts. The new program aims to guarantee payment of credits that meet certain requirements.
The “Financial Relief” platform will enable creditors and debtors to negotiate debt payments under special conditions. Depending on the discount offered by the creditor, the National Treasury will act as guarantor of the transaction.
In other words, if the debtor stops paying the installments as agreed, the Treasury will assume the debt with the creditor. Applications to participate in the program begin in July this year.
Who can participate?
According to information released by Finance Minister Fernando Haddad, “Financial Relief” is intended for low-income individuals. Therefore, only those who receive up to 2 minimum wages and have debts of up to R$ 5 thousand registered with credit protection agencies will be eligible to participate.
Additionally, not all debts can be settled. First, because they must be from December 2022 or earlier. Second, the creditor company must join the program. Therefore, those who have debts with creditors that do not participate in “Financial Relief” will not be able to take advantage of its benefits.
