Brazil Plans to Buy Up Old Household Debts at Up to 95% Off Before Vote
With household loan defaults at a record 5.8% and a presidential vote on 4 October, Lula is set to unveil a plan for the Treasury to buy up old consumer debts at discounts of up to 95%. Who qualifies, the cost and the start date are not yet official. The post Brazil Plans to Buy Up Old Household Debts at Up to 95% Off Before Vote appeared first on The Rio Times .
Brazil's government aims to purchase old household debts at up to 95% off in a bid to clear debtors' names before a presidential election. Finance Minister Dario Durigan announced that the Treasury could acquire these debts through auctions, offering discounts of 95% or more. The plan, set to be presented in São Paulo on September 25, comes nine days before the first round of the presidential election, where President Luiz Inácio Lula da Silva is close to his main rival.
Old household debts, mostly small and unpaid for years, have been held by banks and collection firms. The government's approach differs from the 2023 Desenrola program, as debtors will not need to renegotiate anything. The Treasury may keep collecting a reduced sum or treat the debts as paid. The target group would likely include debts up to R$15,000 taken out during the pandemic years of 2020 to 2022.
The cost of the plan is estimated to be between R$5 billion and R$10 billion, buying debts worth R$200 billion, which is about a third of all overdue debt in Serasa's latest national count. This move aims to clear the names of at least half of today's defaulters.
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