CONSUMER CREDIT AND OVER-INDEBTEDNESS: ANALYSIS OF LAW NO. 14,181/2021

Abstract

The transformation in the consumption profile of Brazilians has resulted in a significant impact on consumers' income, affecting their physical, emotional and social subsistence. The expansion of access to credit, without proper state regulation, has increased the vulnerability of consumers, making over-indebtedness an economic, social and legal problem. Given the lack of specific regulation, the issue has been debated in the National Congress since 2012, culminating in the enactment of Law No. 14,181/2021, known as the Over-indebtedness Law. This law updated the Consumer Defense Code and the Senior Citizen Statute, establishing mechanisms for preventing and renegotiating debts. The doctrine recognizes over-indebtedness as a legal and social problem that affects the dignity of the human person and reinforces the need for transparency and cooperation on the part of suppliers in the contractual relationship. Furthermore, government initiatives, such as the Handbook on the Treatment of Over-indebtedness, CEJUSC's work in the Over-indebtedness Assistance Program, and the Desenrola Brasil Program, demonstrate efforts to mitigate the impacts of excessive debt. Thus, despite the advances provided by legislation, there are still challenges in effectively protecting consumers. The objective of this study is to analyze the transformation of the consumption profile in Brazil and the legal and institutional responses to over-indebtedness, focusing on the enactment of Law No. 14,181/2021 and the government's actions to mitigate its impacts. The research included a review of the legislation and the analysis of initiatives such as the Handbook on the Treatment of Over-indebtedness and the CEJUSC and Desenrola Brasil programs. The results show that, although legislation has made progress in protecting consumers, there are still significant challenges, such as ensuring the dignity of over-indebted people and creating a more sustainable credit market. Government actions have contributed to debt renegotiation, but effective consumer protection still requires more efforts, especially with regard to guaranteeing the minimum subsistence and transparency in contractual relationships. Guaranteeing the minimum subsistence and building a sustainable credit market are essential to enable over-indebted people to get a financial start.