Law No. 11,101/2005 regulates the judicial recovery, extrajudicial recovery, as well as the bankruptcy of legal entities. And it has the power to recover the credits of the debtor company so that it may resume its business activity. A bill provides for a similar solution for individuals.
It is well known that Brazil is going through one of the worst economic and financial crises in history, with approximately 14.2 million unemployed people, according to the latest survey by the IBGE. As a result, the National Congress has been seeking measures to reduce the insolvency of individuals and increase their credit.
To this end, inspired by the Corporate Recovery and Bankruptcy Law, there is currently a discussion about the feasibility of Personal Recovery, by means of bill No. 7,590 of 2017, by the then federal deputy Alexandre Valle.
The bill has 19 articles that govern the rules and the procedure adopted for the processing and adjudication of the recovery of the natural person.
Through the bill, if approved, the debtor who is in default, before insolvency is declared, may request his judicial recovery, which consists of a plan of periodic payments.
But provided that he demonstrates in court the full capacity to fulfill his obligations and that the amount of his debt does not exceed the jurisdictional threshold for filing actions before the Special Court. That is, that it does not exceed forty times the prevailing minimum wage.
The justification for proposing the aforementioned bill, concerning the attempt to reduce unemployment and the rates of default in the country, is considerable; however, the very feasibility of Law No. 11,101 of 2005, created 12 years ago, is debatable, as it is not an alternative for every company.
Therefore, personal recovery should also be resolved, first and foremost, through legal advisory, in order to outline the best alternative to overcome the crisis without overwhelming the judicial system.
Written by Thais Monteiro, lawyer at the Lassori firm.
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