Understanding the phenomenon of “over-indebted” consumers and the framework of Act n. 14,181/2021 in order to protect fundamental rights and personality rights

Abstract

The establishment of a framework to deal with over-indebted consumers was a necessary measure within the Brazilian legal system, which enabled the legislative work that turned into Act 14,181 of 2021. Considering that over-indebtedness reflects on a violation of personality rights while resulting from the vulnerability of consumers to a series of factors, the paper first analyzes the legal framework and the challenges related to the matter. As a structural process, the economic analysis of a certain right to credit shall define boundaries in order to aid the effective implementation of the Act, either by providing credit for those who need it the most, either by allowing payments by the indebted while taking their personal condition in account. Through the hypothetical-deductive method and bibliographic research, the paper intends to demonstrate the reasons for the phenomenon of over-indebtedness through an economic analysis of credit rights in face of the current times.