Debt Collection in Brazil

Brazilian procedural law offers three principal routes to recover a commercial debt, each with a different risk-reward profile.

Enforcement of an extrajudicial enforceable instrument (execução extrajudicial). If the creditor holds a document that qualifies as an extrajudicial enforceable title under the Brazilian Code of Civil Procedure (CPC, Law 13.105/2015, Art. 784) — such as a signed promissory note, a bill of exchange, or a commercial invoice accepted by the debtor — enforcement proceedings can be initiated directly, without a prior declaratory judgment. This is the fastest route, with an average duration of two to four years.

Monitória action (ação monitória). Available when the creditor holds written evidence of the debt (e.g., invoices, contracts, emails) that does not qualify as a formal enforceable title. The court issues a payment order, and the debtor has 15 days to pay, contest, or propose an instalment plan. If the debtor does not oppose, the order becomes enforceable. Typical duration: three to six years.

Ordinary collection action (ação de cobrança). The standard route when documentary evidence is limited or disputed. The creditor must prove the debt through a full trial. This is the slowest option, averaging five to seven years. It is generally the path of last resort.

A formal demand letter (notificação extrajudicial) is not legally mandatory before filing suit, but is strongly recommended as a last attempt to resolve the dispute out of court and to create additional documentary evidence.

Timeline is the most challenging aspect of Brazilian debt collection for foreign creditors. The Brazilian judiciary is chronically congested, and cases move slowly through multiple appellate levels. As a benchmark:

• Enforcement of an extrajudicial title: 2–4 years on average.
• Monitória action: 3–6 years on average.
• Ordinary collection action: 5–7 years on average.

Precautionary measures (medidas cautelares) can be requested at any stage to freeze or attach the debtor's assets, reducing the risk of asset dissipation during the proceedings. Courts may authorise them if the creditor demonstrates the existence of the debt and provides evidence of a credible risk. This tool is particularly valuable in high-value cases.

For up-to-date statistics on the Brazilian judiciary's caseload and average processing times, see the National Council of Justice (CNJ) annual report at https://www.cnj.jus.br/pesquisas-judiciarias/justica-em-numeros/.

Yes. Brazilian law does not restrict foreign creditors from filing suit. However, several practical requirements apply.

Local attorney mandatory. Foreign creditors must engage a Brazilian lawyer. A power of attorney (procuração) authorising the attorney to act is required; it can typically be signed electronically via a link provided by the attorney.

Jurisdiction. The action must generally be brought in the court of the debtor's domicile, unless a contractual forum-selection clause applies or exceptional circumstances justify a different venue (CPC, Art. 46).

Cautio judicatum solvi. When a foreign creditor initiates proceedings without holding an extrajudicial enforceable title, Brazilian courts may require a security deposit equal to 10% of the claim amount. This deposit is refunded if the creditor prevails. Exemptions apply when a bilateral treaty between Brazil and the creditor's country provides otherwise.

Feasibility assessment. Before filing, it is standard practice — and strongly recommended — to conduct a due-diligence search on the debtor's registered assets (real estate, vehicles, bank accounts). A debtor with no traceable assets makes even a favourable judgment difficult to enforce. Asset tracing services and official registries (Bacenjud, Renajud, Infojud) can be consulted by court order during enforcement.

If an asset search reveals no recoverable assets at the time of filing, litigation may not be economically viable. Brazilian law does not provide a simplified insolvency route for individual debtors equivalent to a European bankruptcy petition. Options in this scenario include:

Monitoring the debtor. Assets can appear after judgment — new bank accounts, property registrations, vehicle purchases. Enforcement can be reactivated at any time within the limitation period.

Negotiated settlement. A debtor with no current assets may still agree to an instalment payment plan to avoid the reputational damage of a formal judgment.

Corporate piercing (desconsideração da personalidade jurídica). Under Art. 50 of the Brazilian Civil Code and Art. 133–137 of the CPC, courts may disregard the corporate structure and reach the personal assets of directors or shareholders if there is evidence of fraud, asset commingling, or misuse of the corporate form.

Default interest accrues automatically from the moment of default. Commercial contracts may set any rate above the statutory Selic rate (currently around 10.5% per annum as of early 2026). Accumulated interest can significantly increase the recoverable amount over time. See the Banco Central do Brasil for current Selic rates: https://www.bcb.gov.br/controleinflacao/taxaselic.

For the legal framework governing enforcement proceedings, refer to the official CPC text: https://www.planalto.gov.br/ccivil_03/_ato2015-2018/2015/lei/l13105.htm.

Need help recovering a debt from a Brazilian company? Get in touch and obtain a free quotation for your case.

Q: Is there a minimum claim amount required to sue in Brazil?

A: Brazilian law does not impose a statutory minimum. However, given court fees (which are proportional to the claim amount and vary by state) and attorney costs, claims below BRL 10,000–15,000 are generally not economically viable through ordinary proceedings.

Q: Can I enforce a foreign court judgment or arbitral award against a Brazilian debtor?

A: Yes, but a foreign judgment must first be recognised (homologated) by the Superior Court of Justice (STJ) before it can be enforced in Brazil. This process adds time and cost. Foreign arbitral awards that fall under the New York Convention (to which Brazil is a signatory) follow a similar recognition pathway.

Q: What documents should I preserve to support a claim in Brazil?

A: Signed contracts, purchase orders, delivery receipts, commercial invoices, and all written communication with the debtor (emails, WhatsApp messages, letters) constitute the core evidence package. Records of any extrajudicial payment requests and the debtor's responses are particularly valuable.

Q: Does Brazilian law allow interest on the outstanding debt?

A: Yes. Default interest (juros moratórios) applies automatically from the moment of default. Commercial contracts can set contractual interest at any rate in B2B transactions; in the absence of a contractual clause, the statutory Selic rate applies. Penalty clauses (multa moratória) of up to 2% of the debt value are also common and enforceable.

Q: Can I take out a Mareva-type injunction to freeze the debtor's assets before trial?

A: Brazilian law provides equivalent precautionary measures (tutela cautelar de arresto or bloqueio de ativos via Bacenjud). Courts may grant these before or during proceedings if the creditor demonstrates a plausible claim and a credible risk that the debtor will dissipate assets. A guarantee may be required from the creditor.

Q: What happens to my claim if the Brazilian debtor files for bankruptcy (recuperação judicial)?

A: If the debtor files for judicial recovery (recuperação judicial) or liquidation (falência) under Law 11.101/2005, all individual creditor actions are automatically stayed. Foreign creditors must file their claim with the insolvency administrator. Trade creditors are typically unsecured and rank behind secured creditors, tax authorities, and labour claims.