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Today I want to address the problem of over-indebtedness, which affects an increasing number of Brazilians and ends up affecting the entire family. According to recent research on this issue, the degree of over-indebtedness ranges from 300 to more than 1000% of monthly family income, and this situation goes beyond the financial sphere to become a psychosocial problem.

Research also shows that the largest number of over-indebted people are aged over 55 and earn more than five times the minimum wage.

These figures debunk the belief that only the lower income brackets suffer from over-indebtedness. And they confirm a consolidated reality: pensioners find it easier to get a loan and end up getting into debt on behalf of the family. This is because pensions are used as collateral for payroll loans, followed by credit cards and personal loans.

Surveys of the sector confirm that delinquency among consumers aged 65 to 84 has grown the most. In October, Brazil reached 5.5 million people in this condition, compared to 5.4 million in September. In other words, 100,000 elderly people joined the default list from one month to the next.

This scenario requires a concerted effort to help these people draw up a financial recovery plan so that they can be reintegrated into society. It is common for these people, in order to clear their name, to renegotiate their debt under conditions that are unrealistic for their ability to pay. For this reason, this help from the public sector should include debt renegotiation, through out-of-court conciliation, which is already happening in some states.

It is also important to approve a bill that is currently before the Chamber of Deputies and was proposed by the Senate. Bill 3515/2015 amends the Consumer Defense Code (CDC) and the Statute of the Elderly to prevent or at least make it more difficult for citizens to get into over-indebtedness.

The proposal defines the situation of over-indebtedness as the commitment of more than 30% of the consumer's net monthly income with the payment of all personal debts - excluding financing for the purchase of a house for housing purposes. The text also increases protection for the groups most vulnerable to over-indebtedness. The wording prohibits suppliers from harassing or pressuring consumers to take out a certain product, service or credit, especially if they are elderly, illiterate, sick or in a state of aggravated vulnerability.

At the same time, it is essential to spread the discipline of financial education, to teach young people and children how to protect themselves against default, which is reaching alarming levels in our country. And the introduction of the positive credit card is an initiative that helps to promote financial education.

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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor