Practice areas
Banking law and abusive interest
The instalment keeps growing, the outstanding balance never shrinks, or a repossession claim has arrived for your vehicle.
Bank contracts in Brazil are subject to the Consumer Protection Code, under Precedent (Súmula) 297 of the Superior Court of Justice. That does not make every rate abusive · Precedent 382 of the same court states that interest above 12% per year does not, by itself, indicate abuse. The real dispute is about charges, compound interest, fees and the comparison with the average market rate.
What the practice does in this area
- Review of financing, loan and credit card contracts
- Challenges to interest, compound interest, late-payment commission and fees
- Vehicle repossession (busca e apreensão) in fiduciary sale contracts
- Over-indebtedness and global debt restructuring under Law 14,181/2021
- Out-of-court renegotiation with banks and financial institutions
- Payroll-deducted loans never contracted and wrongful deductions from benefits
- Working capital debt and renegotiation for companies
High interest is not automatically abusive
Precedent (Súmula) 382 of the Superior Court of Justice is clear · agreeing on interest above 12% per year does not, by itself, indicate abuse. What courts examine is whether the contracted rate departs significantly from the average market rate published by the Central Bank of Brazil (Banco Central do Brasil) for that type of credit and period.
Compound interest has a rule and a date
The Superior Court of Justice settled, in binding repetitive appeal rulings, that compounding interest more often than yearly is allowed in contracts signed after March 31, 2000, provided it was expressly agreed. Express agreement can be recognised when the contracted annual rate exceeds twelve times the monthly rate.
Repossession leaves a very short window to react
In fiduciary sale contracts, governed by Decree-Law 911/1969, the debtor has five days, counted from the execution of the seizure order, to pay the entire outstanding debt and recover the vehicle. Missing that window changes the available options profoundly, so advice must be sought immediately.
Over-indebtedness is a regime of its own
Law 14,181/2021 added to the Consumer Protection Code a regime for preventing and treating over-indebtedness. It allows an individual acting in good faith to restructure their debts as a whole, preserving a minimum for living expenses. It does not cover debts taken on with no intention to pay, nor those arising from luxury goods contracts.
Frequently asked questions
Is interest above 12% per year illegal in Brazil?
No. Precedent (Súmula) 382 of the Superior Court of Justice states expressly that agreeing on interest above 12% per year does not, by itself, indicate abuse. The correct analysis compares the contract rate with the average market rate published by the Central Bank of Brazil for that type of credit at the time of contracting, and examines the other charges.
My car was repossessed. Can I still get it back?
In fiduciary sale contracts, Decree-Law 911/1969 gives the debtor five days, counted from the execution of the seizure order, to pay the entire outstanding debt and have the vehicle returned free of the lien. It is a short window that in practice cannot be extended, which makes immediate advice decisive.
Is it worth filing a lawsuit to review my bank contract?
It depends entirely on the contract. A review action makes sense when there is concrete evidence of an improper charge, such as compounding never expressly agreed, late-payment commission stacked with other default charges, or fees that Brazilian case law has already ruled irregular. Without that prior analysis, the lawsuit is usually pointless and can make things worse.
What is Brazil’s over-indebtedness law?
It is Law 14,181/2021, which inserted into the Consumer Protection Code a regime for individuals who, in good faith, cannot pay their debts as a whole without compromising a basic living minimum. It allows a global restructuring of the debts, in a conciliation hearing with all creditors present.
The bank is deducting a loan I never took out. What should I do?
File a formal complaint with the institution and keep the protocol number, ask for a copy of the contract behind the deduction and check the statements of the benefit or account. Deductions based on a contract that cannot be proven can be challenged in court, with requests to stop them, refund the amounts and, depending on the case, compensate.
Informational content only, with no offer of services for any specific case, in line with Rule 205/2021 (Provimento 205/2021) of the Brazilian Bar Association (OAB).