The granting of payroll loans INSS (National Social Security Institute) retirees and pensioners saw a 54% jump in one month. According to the Central Bank, R$11 billion were granted in January this year, compared to R$7.2 billion in December 2023.
But many people who take out this type of loan do not know what happens to the installments owed after the death of a beneficiary. Although the INSS and Febraban (Brazilian Federation of Banks) state that the debt is suspended after death, in practice, this is not what happens.
The modality is offered to those who have a retirement or pension credited to their current account. As the amount is deducted directly from the payroll, it is an easy loan option with low interest, currently at 1.72% per month.
A recent decision by the 10th Panel of the Federal Regional Court of the 1st Region (TRF1) determined that the payroll loan debt remained, despite the death of the debtor.
The rapporteur, federal judge Pablo Baldivieso, noted that the loan contract in question did not include insurance for the borrower’s death, resulting in the debt being due early upon death. Therefore, the death of the consignor does not cancel the loan obligation, as the inheritance is responsible for the debt, within its limits.
The judge voted to maintain the sentence, concluding that the death of the debtor does not cancel the loan obligation. Therefore, the estate or heirs are responsible for the debt within the limits of the inheritance.
Heirs are not obliged to pay with their own money, but the assets left by the person who died must be used to pay off the remaining debt.
Lawyer Rafael Verdant explains that it is not the heirs who must pay, but rather the assets left by the deceased person. If there is no equity, the debt is not transferred to the heirs, but rather extinguished.
“When a person with a loan passes away, in the past it was customary to create an idea that this loan would be extinguished. There was a law that provided for this credit to be extinguished with the death of the debtor. However, this law was changed over the years. years and today there is no longer this provision for immediate extinction upon the death of the debtor”, says Verdant, leader of strategic litigation at Albuquerque Melo Advogados.
Safe
According to him, there are currently two possibilities. The first is when the debtor has insurance, called credit life insurance. This insurance exists to guarantee the debt in the event of the debtor’s death. In this case, the debt is extinguished because it will be guaranteed by the insurance premium.
But, if the debtor did not take out insurance, what is the solution?
Debt is not inherited under Brazilian law. When a person dies, they leave behind an estate. So this estate has to pay the debts. In other words, the inheritance will always pay a designated debt or any other debt.
Rafael Verdant
Labor lawyer Ruslan Stuchi, partner at Stuchi Advogad Ruslan Stuchi, makes a reservation.
The bank that made the loans will have to check how to charge this to the estate. This is if the deceased left assets. It may be that the bank takes action to charge the estate for access to the assets of the person who died. But, as a general rule, in practice, the bank ends up not charging these remaining amounts.
Ruslan Stuchi
Caixa states that, in the event of the death of the contractor for payroll-deductible credit operations, the customer’s family can verify the existence of insurance coverage, such as credit life insurance, and contact the insurer to cover part or all of the loan value. (depending on the conditions of the insurance coverage).
“If there remains an outstanding balance in the contract after the insurance coverage has been activated or if the client does not have such coverage, it is up to the heirs of the deceased contractor to pay off the loan debt contracted by him, within the limits of the inheritance. This is the unanimous understanding of the 10th Panel of the TRF-1, which establishes that the death of the debtor does not cancel the loan obligation”, states Caixa in a note.
“The bank makes available to all customers a list of options for renegotiating credit operations, in order to provide the best service to each of its customers or the heirs of its deceased customers”, adds the text.
The INSS informed that “the heirs do not have to pay off the consignment, the institution assumes the risk of the operation”. According to Febraban, in these cases, the debt is extinguished.
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