More than 5 million debt contracts have been renegotiated with steep discounts under Brazil's Novo Desenrola program, which officially ends this Monday (31). The deadline means households earning up to R$ 8,105 per month (roughly five minimum wages) have only hours left to clear their credit records under government-backed terms.

Total debt value dropped from R$ 26.33 billion to R$ 5.27 billion after settlements, according to ministry figures reported by InfoMoney. That average discount of roughly 80% represents collective savings larger than the annual budget of a midsize Brazilian municipality, slashing overdue credit card and overdraft balances by up to 90%.

How it works

How it works: Overdraft limits and revolving credit card debt carry the highest interest rates in Brazil when balances go unpaid month after month. Under Desenrola, that compounding debt is replaced with a single new loan capped at 1.99% monthly interest over up to 48 months, with installments starting at R$ 50 (less than the price of a basic lunch in major cities).

Consumers must contact their bank directly through mobile apps, websites, or branches, as there is no central government portal for this phase. Major lenders including Caixa Econômica Federal, Banco do Brasil, Itaú, Bradesco, Santander, and Nubank joined the voluntary initiative.

Workers can also draw on their FGTS (Brazil's mandatory severance guarantee fund) to pay down debts, using either R$ 1,000 or up to 20% of their available balance. Credit bureaus clear the debtor's record as soon as the first installment is paid.