Almost half – or 42% – of Brazilian adults are late in paying their bills. There were 63,6 million defaulters in Brazil during the first six months of this year.  The information is from the Credit Protection Service (SPC Brasil).

According to Marcela Kawauti, chief economist of SPC Brasil, the number is high and has increased because of the economic crisis in the country. “Because the economy has not grown, many people remain unemployed, with no money to pay their debts, and they end up defaulting. Poor planning is another reason,” she says. Find out more about the topic:

Debtor – Someone who has a debt to pay.

“Having debts is not bad. An apartment, for example, is very expensive and usually we need to pay it in installments to be able to buy it. You just have to be careful to pay all the installments when they are due.”

Defaulter – Someone who is late paying a debt

“This is bad: because of the delay, interest will be applied resulting in an even larger debt. That is, if you delay paying a bill, aside from the bill, you will have to pay an extra fee.”

Bad credit –  Someone who has their name on a list of bad creditors

“When someone defaults, the company to which they delayed payment will put their name on a list. This can prevent those who have bad credit from taking on more debt or renting property.”

Tips on how to avoid getting in debt

– Be patient. Avoid debt on items you can pay in cash. Example: save money every month to buy the sneaker you want.

– Make a list of all the expenses for that year.

Example: if you have a monthly mobile phone bill, make plans for how much more you will need to save every month for a trip.

Help your family cut down on their expenses so they can pay their debts.

Example: if your family is on a tight budget, wait a few months to buy a t-shirt you like, but do not really need.

QUESTIONS:

1) Choose the correct statement:

A) A defaulter is someone who has debts.

B) A debtor is someone who has late bills.

C) Planning expenses is a way to avoid defaulting.

D) There is no connection between the economic crisis in Brazil and the increase in the number of defaulters.

2) What would you do to help you family pay their debts on time?