How to get out of debt with a method

Where do I start?

The first impulse is to pay whoever pushes hardest: whoever calls more, whoever sends more messages. That is understandable, because collection calls are unsettling. But whoever pushes hardest is not always whoever charges the most.

Before paying anything, put all your debts on the same sheet. For each one, write down how much is left to pay, the installment amount, the monthly interest and what happens if you fall behind: whether a service gets cut, whether you could lose an asset, whether your name goes on the defaulters' list. The interest appears in the contract and on the bill as the total effective cost, the CET, and lenders are required by law to state that number clearly.

Next to the list, write down your month: how much really comes in and goes out, looking at your last three bank statements, not the month you wish you had. That difference is where the money for the plan comes from.

Which debt should I pay first?

With everything on the same sheet, the order usually becomes clear on its own. First come the bills that keep the house running, such as housing, electricity and water, and secured debts, where falling behind could cost you the car or the home. Then come the most expensive ones.

In most cases, the most expensive debts are the revolving credit card balance and the overdraft. They charge interest several times higher than a personal loan, and every month spent in them makes the debt grow faster than the payment can shrink it. That is why the money left after the essentials goes to the highest-interest debt, while the others get the agreed minimum.

Some people prefer to pay off the smallest debt first, for the relief of crossing a name off the list. It works for those who need a quick win to keep going, but it costs more in the end. It is worth knowing the difference before choosing.

Is it worth swapping an expensive debt for a cheaper one?

Often, yes. Swapping the revolving card balance for a loan with lower interest, or moving a loan to another bank that charges less, reduces the cost of the same debt. The law guarantees the right to pay off a loan early at no extra cost, and that is what makes the swap possible.

The swap only helps if the card stops creating new debt. The most common mistake is paying off the card bill with the loan, feeling the relief and going back to using the limit as before. A few months later you have both debts, the loan and the card again. Before swapping, the question is what changes in your month so the bill fits your income.

What if the debt is already more than I can pay?

There is a situation no payment order can fix: when, adding everything up, there is no way to pay your consumer debts (credit card, loans, store installment plans, service bills) without giving up the basics you need to live. For that case Brazil has had its own law since 2021, the over-indebtedness law, Law 14,181.

If you are in that situation, in good faith, you can ask for a single payment plan with all creditors at once, over up to five years. The request is made to Procon, the consumer protection agency, or to the courts, which bring the creditors into the same conversation. The plan must preserve the existential minimum, an amount the law protects for basic expenses, and it can extend deadlines and reduce charges. A creditor who misses the hearing without justification has collection suspended and late-payment interest stopped.

Real estate financing, debts with collateral and rural credit are left out, as are debts taken on in bad faith or for high-value luxury purchases. And a new request can only be made two years after the plan is completed.

How do I stay out of debt?

Large debt rarely comes from a single decision. It is usually the sum of months in which money went out with nobody looking where, and the card covered the difference. Paying it off settles what is behind you; what protects you from here on is seeing the month as it happens.

What keeps someone out of debt is a budget they can actually follow. Drastic cuts rarely last. In practice, this means knowing every month how much came in, how much went out and where it went; having a reserve, which can start small, so the next emergency does not go on the card; and reviewing the plan when life changes.