Negative debt: How do I know if I have one? What should I do? Complete guide!

Today I'm here to help you with your financial issues by talking a little about the negative debts.

Many people don't fully understand what negative debt is, and as a result, they end up getting into trouble with their finances, resulting in several negative consequences.

That's why my intention is to create a complete guide on the subject so that you can leave here understanding what negative debt is, what the consequences are, how to pay it off, and much more!

What is negative debt?

To put it simply, a negative debt is an account that hasn't been paid off within the stipulated timeframe and, after a period of time, has been registered with one of the credit protection agencies, such as Serasa and SPC. In more straightforward terms, having a negative debt implies having your name marked as delinquent, which can lead to a series of financial complications, such as:

• Credit score reduction
• Difficulty obtaining new loans or financing
• Restrictions on obtaining credit cards
• Increased interest rates on future loans
• Difficulty opening bank accounts
• Restrictions on renting properties

What is the difference between a negative debt and an overdue account?

Let's highlight the difference between negative debt and overdue accounts, as these terms may often seem interchangeable but have distinct meanings. Let's take a look:

• Negative Debt:
  • Refers to an account not paid on time, which was officially registered as a defaulter with credit protection agencies like Serasa and SPC. Remember that every debt listed as negative was previously an overdue bill...
• Overdue Account:
  • It is an account that was not paid within the established deadline, but which was not necessarily officially registered as delinquent with credit protection agencies.

How do I know if I have negative debt?

It's much better to be aware of your financial situation than to be caught off guard when you find out that you have negative debts in your name.

To check if you have any negative debts in your name, there are a few accessible and practical ways. Here are the main ones:

1. Online Consultation with Credit Protection Agencies:

   • Visit the Serasa and SPC Brasil websites.
   • Look for the free CPF consultation option.
   • Fill in your personal details and follow the instructions to complete the consultation.
   • You will receive a detailed report on your credit situation, including information on any negative debts, if any.

2. Bank and Financial Institution Applications:

   • Many banks and financial institutions offer apps that allow customers to check their financial situation, including bad debts.
   • Log in to your banking app.
   • Look for sections related to credit inquiries or financial status.
   • Follow the instructions provided to view your negative debts, if any.

3. In-Person Service:

   • You can also go in person to a Serasa or SPC Brasil branch.
   • Bring an official photo ID and your CPF.
   • Request a consultation on your financial situation and negative debts.
   • An attendant will provide the necessary information and guide you through the next steps, if applicable.

Regardless of the method you choose, it's important to perform this check periodically to stay aware of your financial situation and take the necessary steps to settle any outstanding debts.

How to pay negative debts?

Having a bad credit history can be very detrimental depending on your stage of life. Therefore, in these situations, resolving this issue as soon as possible is recommended.

To pay off a negative debt, the first step is to assess your financial resources and compare them to the amount owed. If you can pay off the debt, follow the steps below:

1. Direct Payment to Creditor:
   • Contact the debtor, either by phone, email, or in person.
   • Negotiate debt repayment, seeking discounts or installment terms that suit your financial possibilities.
   • Once you reach an agreement, make the payment as agreed, whether by bank slip, transfer, deposit, or another method accepted by the creditor.

If you don't have enough financial resources to pay off your debt all at once, consider the following alternatives:

2. Payment by Credit Card:
   • Consider using your credit card to pay off your debt.
   • Choose an installment option that is viable for your finances, considering the interest and fees involved.
   • Make the payment using your credit card, following the instructions provided by the creditor.
3. Loan:
   • Consider taking out a personal or payroll loan to pay off the debt.
   • Compare the terms offered by different financial institutions, taking into account interest rates, repayment terms, and total loan costs.
   • After choosing the best option, apply for the loan and use the funds obtained to pay off the negative debt.
4. Clean Name Program:
   • Access the Serasa Limpa Nome Online website (Click and access the official website) and register.
   • After registering, you will have access to your negative debts and will be able to negotiate directly with creditors, taking advantage of discounts and special conditions offered by the program.
   • Once you reach an agreement with your creditors, follow the instructions provided to make the payment and regularize your financial situation.

Some other questions about negative debt

To make this guide more comprehensive, I've compiled some additional questions about bad debt that might help! Check it out:

Does negative debt expire?

Brazilian legislation states that, after five years from the due date of the debt, they can no longer be subject to legal collection.

This means the creditor can no longer file a lawsuit to demand payment of the debt. However, the debt remains registered with credit protection agencies for up to five years from the due date, which may affect your ability to obtain credit in the future.

AND credit card debt? expires or not? See the post we made on the subject.

"I paid off my debt and my credit score remains bad." What should I do?

After paying the debt, the creditor has 5 business days to remove the former debtor's name from the default records.

If after these 5 days, your name remains dirty, you have two options left.

• Contact the creditor institution to present all proof of payment related to the negative debt that has already been paid off.

If this still doesn't work, there's still:

• Submit an official request to agencies such as Procon and/or contact a lawyer.

Why doesn't my negative debt appear on Serasa?

This can happen because the debt is very recent. It's also important to remember that Serasa isn't the only agency that registers defaulters, such as:

• SCPC
• SPC Brazil
• Boa Vista SCPC

If you know you have a negative debt, but you can't find your name on Serasa, I recommend checking these other defaulter databases.

When a name is on the SPC, is it automatically on the Serasa?

Not necessarily.

The two companies are separate and have distinct databases. Therefore, your name may appear in only one of them.

How to avoid negative debt?

I've taught you everything you need to know about dealing with negative debt, but it's also important that you learn how to avoid this situation again. So here are some tips to avoid debt:

1. Plan your expenses intelligently: Before spending, do some financial planning to ensure your money is used efficiently.
2. Prioritize What's Really Important: Separate your expenses into categories and prioritize those that are essential to your life and well-being.
3. Think Twice Before Buying: Avoid impulse purchases and think about whether what you are about to purchase is really necessary or just a momentary desire.
4. Prepare for the Unexpected: Keep a financial reserve to deal with unexpected expenses, such as medical expenses or unexpected repairs, without having to resort to loans.
5. Keep an Eye on Your Finances: Regularly track your expenses and income to ensure you're staying within your budget and identify any financial problems early.
6. Use Credit Responsibly: Avoid abusing available credit by using cards and loans only when necessary and always considering your future repayment capacity. Remember, every credit purchase is a debt to be paid off.