The Brazilian economic context is deeply connected with the indebtedness of people in our country. Well, we know that factors such as unemployment, inflation and the social and political scenario directly affect the financial lives of millions of Brazilians every year. Thus, the consequence may be the imbalance of personal finances, causing individuals and their families to become indebted.

For example, still in 2018, Brazil experienced strong turmoil such as the truck drivers' strike and the most troubled election year in recent times. Thus, the country ended the year with an increase in informality among workers, and also with an increase in defaults.

Therefore, factors such as unemployment and default always go hand in hand in the economic outlook of a country. So, in Brazil it couldn't be different, right? Here, the increase in unemployment directly influences the loss of Brazilian purchasing power, with a disorganization of finances and the consequent indebtedness.

Regarding these factors, the year 2019 had been projecting an improvement in the debt scenario in Brazil, with a 2% growth in the Gross Domestic Product (GDP). However, as we know, the year 2019 ended with the beginning of the spread of the coronavirus in China and Europe. Thus, in 2020 the pandemic would reach Brazil and seriously affect the social, political and economic scenario of the country.

As a consequence, the indebtedness scenario in Brazil has changed, increasing the difficulty for people to get credit from financial institutions. And this because they are negative with the SPC and Serasa, for example.

Because, with the advancement of the pandemic and the increase in restrictions on trade and companies, many workers ended up losing their jobs or seeing their family income drastically decrease. Thus, as we said, unemployment and default go hand in hand whenever an economic crisis hits the country.

Then, with the increase in unemployment and the difficulty of thousands of Brazilians to pay their debts, the number of debtors in Brazil grew. But the indebtedness situation becomes even more serious when we think of another factor: the average Brazilian's lack of knowledge about the world of finance.

Because, of course, not understanding well how the organization and planning of your personal finances works is something that can be a facilitator of debt in Brazil. Thus, people apply for loans and sign financing contracts without having good financial planning or a sense of goals and objectives to achieve with the money.

But what are the reasons that link the panorama of debtors in Brazil and the lack of financial education in our country? So, let's take a deeper look at the situation regarding knowledge about the world of finance among Brazilians.

We know that in Brazil, financial education is still seen as something complicated and not accessible to all Brazilians. And that really was a reality until a short time ago, as access to this type of knowledge was really more restricted.

However, despite not yet being a concrete reality directly in public schools in Brazil, financial education is becoming a very relevant and discussed subject in the country. Thus, better understanding how the world of finance works has become a topic that is invading the internet and becoming more popular.

So, it is precisely through the internet that people have more access to financial education and seek to better understand what it is. Because, whether through social networks, specialized blogs or online courses, financial education seems to be reaching the status of essential knowledge.

We know that many people associate financial education only with the possibility of accumulating wealth, making investments, etc. But it's not just that! Of course, everything is interconnected, but understanding finance will mainly help you organize the way you relate to money in your day-to-day life.

Thus, financial education has reached people who are concerned about their debt situation, or even those who have not yet become indebted and want to avoid this situation. Once upon a time, understanding finance seemed complex and would only be useful for investors and people with money. Quite the opposite!

Since understanding financial education is what will best guide people in Brazil on how to organize their money, the way they spend, save, invest, etc. That is, with a good understanding of finances, it becomes more difficult for Brazilians to enter into disadvantageous loan contracts, fall into scams or lose control of their domestic budget to the point of becoming defaulters.

Thus, there is the emergence of information on financial education on the platforms of financial institutions, in addition to free courses and accounts on social networks that explain finances in a light and simple way. So all this changes the way people spend their money and manage their debt.

In short, the higher the level of financial education in a country, the lower the debt level of its inhabitants. In other words, with the study of finance becoming less and less a taboo, the panorama of indebtedness in Brazil is also changing.

But after all, what is the average profile of the indebted Brazilian? Well, as we could see, the indebtedness in Brazil is directly influenced by the levels of inflation, unemployment and default. So, let's understand in a deeper way how are the people who end up in debt in Brazil.

Did you know that having difficulties in organizing a household budget well and managing money is still the reality of many Brazilians? Because most people in our country still live spending almost everything they earn, and few are those who remember to create an emergency financial reserve.

In this way, the panorama of Brazilian debtors is born, since the lack of control of personal finances is among the main causes of debts in Brazil. In addition, the profile of the indebted Brazilian is basically to think in the short term, but never in what his financial situation will be in the long term.

Thus, Brazil adds the lack of financial education to the unfavorable economic scenario due to the pandemic since 2020, and the result is millions of defaulters and debtors. But who is the average indebted Brazilian?

Contrary to what one might imagine, it is not among people with lower incomes that the profile of indebted Brazilians is found. Because it is among borrowers with income between 5,000 reais and 10,000 reais that there is the highest incidence of indebtedness.

Thus, according to a government report from the December 2019 Financial Citizenship series, around 54% of borrowers are in the middle income range, between 2,000 and 10,000 reais. Furthermore, the propensity for risky debt is much lower among low-income people, which goes against popular thinking.

In other words, the panorama of risky debt indicates that the profile of Brazilian debtors is middle class. But for you to understand even better what are the main characteristics of the average debt profile in Brazil, check out the following list:

So, basically the profile of the indebted Brazilian is that of a person with an average income – between 2,000 reais and 10,000 reais -, aged over 54, female and resident of the northern region of Brazil. 

And this is justified by the fact that people in this income bracket have more access to financial products and credit limits. But, at the same time, this profile did not have easy access to a good financial education, is not very familiar with the internet and, in general, is not aware of the importance of financial knowledge. your household income.

In addition, we cannot forget that the current scenario of economic instability can lead these people to need more credit, but without the knowledge to manage loans and debts. 

In this way, we realize that the indebtedness scenario in Brazil is a complex phenomenon, which must be seen through different factors: economy, politics, unemployment, default, financial education, income, age group, gender, place of residence, etc.

Thus, public policies in Brazil must be aimed specifically at understanding and helping the Brazilian debtor, with a preventive approach and treatment of the situation. But of course, debt is not an exclusive situation in our country, right? So let's now look at how the debt scenario is in the rest of the world. 

We now have a better understanding of the debt scenario in Brazil, as well as the factors that influence this context. Furthermore, we understand the average profile of Brazilians in debt in our country.

But how does Brazil compare to other countries in the world that are also indebted? To begin with, we need to point out that, among Latin American countries, Brazil has the highest fiscal debt.

However, it is not just in Brazil that the economic scenario is not going through its best moment since 2020. As expectations for growth in 2020 were small globally, around 2.5%. And this trend could increase as 2021 unfolds and frictions occur on a commercial and political level. 

Thus, in 2020 the World Bank already warned in January of a global debt risk, even with historically low interest rates. That is, the increase in global debt was quite significant, and there are still no signs of a decrease in this scenario so far.

But behind this global context, the two biggest drivers of debt are the United States and China. Thus, China is a country that has an international debt that is close to 310% of its Gross Domestic Product (GDP), which places the country among those with the highest debt ratio among emerging economies (including Brazil). .

So, check below a list of data from January 2020 on the level of indebtedness of so-called developed countries, with 'mature markets', for comparison with China:

Among the countries considered emerging, with “developing markets”, Brazil has the second highest public debt, second only to Lebanon, which has 155% of GDP in debt.

For in the Brazilian case, the indices reached 88% of GDP in 2019. However, the highest debt growth considering the total indebtedness among emerging countries was for South Korea and Chile.

But despite this, due to the entire internal and specific context of each of these countries, they are in a safe position. What cannot be said about Brazil's debt scenario, for example.

So, to make the debt scenario of each country clearer, see the list below:

In other words, in terms of the indebtedness scenario in relation to our neighbors in Latin America, Brazil is in first place.

As we have shown, Brazil's debt scenario is complex and takes into account an international economic and political scenario. In addition to the current issue regarding the COVID-10 pandemic. 

But this also applies to the issue of Brazilian debt, which is also directly influenced by this macro and micro economic scenario. However, it is interesting to point out that debtors in Brazil are also trying to solve their problems and recover their credit. But how?

First, let's understand how people in Brazil think when they think about paying off their debts and getting their credit recovered:

Regarding the profile of companies, we know that credit cards and store cards are among the types of open accounts that most cause default and indebtedness in Brazil. In addition, approximately 84% of Brazilian companies usually enter the name of defaulting consumers in credit protection registers, such as SPC and Serasa.

But for you to understand better, the overview of financial products and services that cause the most indebtedness in Brazil is as follows:

Thus, the debt profile of Brazilians compromises 768% of the monthly family income of 2,822 reais among the average defaulting consumer in our country. That is, the final average debt of people reaches the value of 21,676 reais.

But what is the reason for people in Brazil to reach such high levels of debt? Well, about 48% of defaulting consumers in the country claim that it was the lack of personal finance planning that facilitated this situation.

In other words, it is the lack of a good base of financial education that leads to a lack of control in the personal budget and the taking of risky decisions with taking out credit. But there are also the factors of unemployment, the drop in family income, delays in wages and excess monthly expenses.

So, how to get out of this indebtedness situation and recover credit in the market? In short, you can start with the following basic attitudes:

But that's a pretty general picture. So, check out some more tips on how to get out of debt below!

After all the explanation about the panorama of debts in Brazil and the Brazilians, it is time to understand how to put into practice attitudes to settle your debts as soon as possible and get out of the red.

for those who want tips to pay off debts in 2021, it is very important to start thinking about the need to have a clean name. Because those who are negative find some difficulties and obstacles to apply for credit and take advantage of financial products, such as credit cards with a pre-approved limit.

So, for that first moment of reflection before taking action, you need to understand the reasons that led you to be in debt that you cannot pay off. After that, you need to think about all your debts and identify them one by one.

That is, it is time to put into practice good planning of your personal finances. Also, how about checking if you have debts old who didn't even remember? Because they can be one of the main reasons why you have restrictions on your CPF, and you need to regularize this situation as soon as possible.

Thus, there are 3 ways to know if there are old outstanding debts:

But you might be wondering: the debt expires? Because many people forget about old debts when carrying out financial planning to clear their name, thinking that they expire.

But it's not like that. At first, debts over 5 years old will expire and you will have your name withdrawn from credit protection bodies such as SPC and Serasa. But the debt will remain open with creditors, which can make it difficult and even impossible for you to purchase financial products and services from them again.

Furthermore, if your debt for more than 5 years is with a financial institution, your name will continue to be registered as a debtor with the Central Bank's Credit Information Service. Thus, you may be limited in granting credit over the years.

In short, carry out financial planning taking into account all your outstanding debts, even the oldest ones that may already be “expired”. After that, it is very important to organize which debt to negotiate first, without waiting for creditors to have to contact you to request negotiation.

In this case, the key point is the interest that is charged on the debt. That is, start with those outstanding debts that have the highest interest rates. Then, reflect on the possibility of paying off the full amount or carrying out credit portability and getting better payment terms.

Thus, you can carry out various simulations on online platforms, such as Serasa eCred, and negotiate your debt online with new creditors. In addition, there are moments like Serasa's Clean Name Fair that seek to facilitate the negotiation and portability of debts.

Also, always look for ways to save money when paying off debt. Because balancing your household budget and your personal finances is also very important to take this step of getting out of debt for good. 

Thus, it takes a change of habits and more interest in financial education. So how about start your financial control? So, think about all your recurring expenses, outstanding debts, paid off debts, superfluous and essential expenses, etc. Also, create your own financial goals and develop discipline.

That way, you will be able to stop being part of the indebtedness panorama in Brazil, and you will achieve good financial management with new opportunities!