Brazil’s Household Debt Buyout Pushes Unbudgeted Costs to US$8.2 Billion

BRAZIL · HOUSEHOLD DEBT

Updated 1 times · Latest: 27 September 2026

Brazil’s new plan to buy old household debts, with a betting ban and a Bolsa Família rise, comes to as much as R$42.3 billion (about US$8.2 billion) in costs and lost revenue, mostly in 2027, none of it in the 2027 budget bill. The plan, Desenrola 3.0, launched on 25 September, targets debts that banks no longer expect to recover.

The state aims to buy R$150 billion (about US$29 billion) of overdue loans for about R$15 billion (about US$2.9 billion). The launch, in São Paulo, came nine days before a presidential first round in which Lula is running close to his main rival.

What changed on 27 September

Three pre-election measures, this plan included, add up to R$42.3 billion (about US$8.2 billion) in costs and lost revenue, mostly in 2027. O Globo added up the government’s figures on 26 September, and CNN Brasil reported about R$42 billion.

The largest item is R$22 billion (about US$4.2 billion) for a 15% Bolsa Família rise over a full year. The minimum monthly benefit rises from R$600 to R$691 (about US$116 to US$133) from October.

Desenrola 3.0 accounts for R$15 billion (about US$2.9 billion), its spending cap, with payments from 2027 that may run into 2028. The betting ban removes R$5.3 billion (about US$1.0 billion) of 2027 tax revenue, Planning and Budget Minister Bruno Moretti estimated.

None of this is in the 2027 budget bill sent to Congress on 31 August. Ministers say cuts elsewhere will make room within the fiscal rules, and the next president will run that budget.

What the government announced

At the event, President Luiz Inácio Lula da Silva signed a provisional measure banning online betting. Finance Minister Dario Durigan then announced the new debt programme.

The legal text appeared in an extra edition of the official gazette dated 25 September as Provisional Measure 1,393, signed by Lula. A provisional measure has the force of law at once but lapses unless Congress approves it within 120 days, not counting its year-end recess.

The measure amends the 2023 Desenrola law and runs the programme until 30 June 2028. It caps the state’s spending on debt purchases at R$15 billion (about US$2.9 billion), subject to budget room.

Banks and other creditors sell portfolios at auction, and the biggest discount wins, subject to a minimum discount of 90% of face value. Banco do Brasil or Caixa can run the auctions and manage the debts, including through investment funds.

Debtors can then settle in cash, or in instalments on terms set by the National Monetary Council. Either way, the discount they get can be up to the one the state obtained at auction.

A finance ministry act must still set the auction rules and any further conditions for debtors. The measure also tells the National Monetary Council to promote responsible lending and clearer financial products.

It also gives the separate Desenrola Adimplentes programme, for borrowers who are up to date, a new 120-day window to offer and sign deals. Lula said the new round was better than the last two.

“Now it is the government that will buy the debt and sort out people’s lives,” he said, as quoted by Estadão. Desenrola, roughly “untangle,” is the brand of Lula’s debt-relief rounds since 2023.

On 17 September Durigan had told the newspaper Extra that this plan should not carry the name, because Desenrola meant renegotiation.

How the debt purchase works

Banks will be invited to sell bundles of old household debts to the state at auction. “The one that sells its portfolio at the biggest discount wins,” Moretti said, according to Brasil 247.

Under the measure, the buyer is the state or a fund, with Banco do Brasil or Caixa hired to run the auctions and manage the debts. The first auction is planned for November, O Globo and Brasil 247 reported.

Moretti said such portfolios already trade at discounts of about 90% to 95%, because banks struggle to collect them. He put that market at about R$50 billion (about US$9.6 billion) a year.

The discount will be passed on to debtors. “These discounts will be passed directly to the families,” Moretti said.

This is not a write-off, InfoMoney and O Globo reported. Once the state buys a debt, the credit record is lifted, but the debtor owes the Treasury a reduced sum.

Repayments would carry lower interest in instalments matched to income, according to InfoMoney. Moretti gave no income limits, instalment terms or interest rates, Brasil 247 noted.

In Brazil, a debtor in default is listed by credit bureaus such as Serasa and often cannot get new credit. Clearing that record is the plan’s main promise.

Which debts qualify

The measure sets two tests. A debt must have been unpaid for more than 720 and fewer than 1,645 days on 25 September 2026, roughly two to four and a half years.

Its original value must also be below R$10,000 (about US$1,930). Creditors must offer all of a debtor’s eligible debts with them, not pick and choose.

The text is wider than the bank debts described at the launch. Besides loans from banks and other lenders, it can also cover other debts that can put someone on a credit blacklist, such as unpaid bills from utilities, shops and service providers.

Auctions can be run in stages, for example separately for bank and non-bank debts. The finance ministry may also let creditors add younger debts at the same discount, and larger ones, for which the state pays as if they were R$10,000 (about US$1,930).

It may also require creditors, as a condition of selling, to hand over debts older than 1,645 days free or for a token sum. The age window matters.

Under Brazil’s consumer code, a negative entry must be removed from credit-bureau records after five years. The measure itself sets no income limit, though a finance ministry act may add criteria for debtors.

The Novo Desenrola, the second round, was limited to people earning up to five times the minimum wage.

What it will cost

The government puts the stock of eligible old household debts at R$300 billion (about US$58 billion). It aims to buy about half, or R$150 billion (about US$29 billion).

At a 90% discount, that costs the state about R$15 billion (about US$2.9 billion). At 95%, the top of today’s market, the bill would halve.

The official estimate is above the R$5 billion to R$10 billion (about US$960 million to US$1.9 billion) reported before the launch. Moretti later said payments start in 2027 and will be met by cutting other spending, not by raising the total.

Fabio Graner, a columnist at O Globo, wrote before the launch that such a purchase counts as primary spending. Brazil’s fiscal target is set on the primary balance, which excludes interest payments.

Valor Econômico, a business daily, had reported that the economic team intended to fit the cost inside the budget and fiscal rules.

How deep Brazil’s household debt runs

Serasa counted 83.98 million Brazilians in default in August, up just 0.06% from July. That equals about two in five Brazilians, children included.

Their overdue debts totalled R$586.4 billion (about US$113 billion) in July, according to Serasa. The R$150 billion (about US$29 billion) target is roughly a quarter of that.

Household loan defaults, meaning payments more than 90 days late, reached 5.8% in July. That was the highest since the series began in March 2011 (see Brazil’s Household Loan Delinquency Climbs to a July Record).

Repayments took a record 28.9% of family income in June. Total household debt that month stood at 49.8% of a year’s income, a tenth of a point below the record.

Earlier relief rounds helped but did not reverse the trend. The first Desenrola renegotiated about R$53 billion (about US$10 billion) for around 15 million people from 2023.

The Novo Desenrola renegotiated R$28.37 billion (about US$5.5 billion) from May and closed less than a month before the new launch. O Globo found 30.34% of its instalment deals behind on payments in September, a figure the ministry is checking.

The betting ban and credit rules

The same event ended legal online betting, as reported in Brazil Bans Online Betting: Deposits Stop, Sites Go Dark on 6 October. Deposits stop once the measure is published, and sites go offline on 6 October.

Durigan said more than R$60 billion (about US$11.6 billion) had gone to licensed betting firms. The government links that drain to household arrears.

Moretti said the debt measure also asks regulators, chiefly the central bank, to curb abusive lending, according to Brasil 247. Folha had reported that officials saw such safeguards as essential to stop relapse.

Central bank governor Gabriel Galípolo said this week that the bank was worried by “aggressive and predatory” credit offers.

The election and the critics

Brazil holds the first round of its presidential election on Sunday 4 October. Lula faces Senator Flávio Bolsonaro of the right-wing Liberal Party, son of former president Jair Bolsonaro.

Polls show a tight race, as in Brazil Poll Shows Lula Edging Flávio Bolsonaro 46% to 45% in a Runoff. A Datafolha poll on 24 September put Lula at 40% and Flávio at 36% in the first round.

O Globo counted six vote-friendly announcements this month, one every four days. They include a 15% rise in Bolsa Família cash transfers and larger fuel subsidies.

Flávio has promised a rival debt plan, SOS Brasil, with discounts of up to 90% through the state lender Caixa. He called the betting ban “hypocritical, electioneering and populist,” the news site Metrópoles reported.

No response from his campaign to Desenrola 3.0 itself had been reported by Friday evening. Brazil’s Elections Law bans handing out free goods, money or benefits in an election year.

The main exception is social programmes set in law and already funded the year before. Government lawyers reviewed the design before the launch, Valor reported.

It said the legal risk was greatest if debts were cancelled outright; the announced plan instead has families repay a reduced sum. An O Globo editorial in May called the Desenrola relaunch “electioneering” and said repeated relief “punishes the good payer.”

Durigan blames a “pandemic of debt” inherited from the previous government.

What comes next

The next step is a finance ministry act setting the auction rules and any further conditions for debtors. The measure leaves those details to the ministry.

The Treasury or a federal bank must then run the November auction, after the 4 October first round. Debts would be restructured only after the purchase, Moretti said.

The plan does not make old household debts vanish. Debtors would still owe a reduced sum, and there is no sign-up yet.

Nor does it mean cheaper credit for everyone. It targets old household debts that banks have given up on, not the repayments squeezing families who still pay on time.

The details to watch are the ministry’s act, the auction rules, any income limits and the instalment terms the National Monetary Council must set. All conversions here use BRL 5.19 per US dollar (27 September 2026).

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Frequently Asked Questions

What is Brazil’s Desenrola 3.0?

It is a plan, launched on 25 September 2026, for the state to buy old unpaid household debts from banks and other creditors at auction. Debtors can then settle in cash or in instalments, at a discount of up to the one the state obtained.

Which debts qualify?

Debts unpaid for roughly two to four and a half years, with an original value below R$10,000 (about US$1,930). Bank loans and other debts that can lead to a credit blacklisting, such as utility bills, can be included.

When will debts be bought?

The government plans the first auction for November 2026, run by the Treasury or a federal bank. There is no sign-up for debtors yet.

How much will it cost?

About R$15 billion (about US$2.9 billion), to buy R$150 billion (about US$29 billion) of debt at a 90% discount. The final cost depends on the discounts banks offer at auction. Payments are due to start in 2027.

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