Why Getting Out of Debt Seems Impossible — But It’s Not
You look at your bank statement, see the negative balance or accumulated installments, and it feels like there’s no way out. This impression is more common than it seems: according to data from the Consumer Debt and Default Survey (Peic) by the National Confederation of Commerce (CNC), Brazil consistently has over 70% of families with some type of debt. The problem is not exclusive to those who “don’t know how to manage money” — it affects workers, freelancers, and even people with stable income who have faced unforeseen events.
The good news is that getting out of debt with little money is possible, but it requires method, honesty with yourself, and patience. There is no magic formula or painless shortcut. What exists is a set of concrete steps that, when applied with discipline, produce real results over time. This guide was created precisely for those who are at the beginning of this journey — without extra money, but with the desire to change the situation.
First of all, an important point: depending on the type and volume of your debts, the guidance of a professional (a lawyer specialized in consumer rights or a financial advisor) can make a significant difference. This article is educational and presents general strategies. Let’s see what to do.
Step 1: Face Reality — Map Everything You Owe
The first instinct of those in debt is usually to avoid thinking about the problem. It’s understandable, but counterproductive. You can’t negotiate what you don’t know.
How to map:
- List all the debts you have, without exception: credit card, overdraft, personal loan, store installment plan, financing, debts with individuals.
- For each debt, note:
- Creditor (bank, store, person)
- Total outstanding amount
- Monthly (or annual) interest rate
- Remaining installments (if any)
- If the debt has already been reported to credit bureaus (SPC/Serasa)
- Sum everything up. This total number may be frightening, but knowing it is the first step to tackling it.
Use a simple spreadsheet, a notebook, or a personal finance app. The important thing is to have everything visible in one place.
Step 2: Understand Interest Rates — The Number 1 Enemy
Not all debt is the same. The difference between them lies mainly in the interest rate, and ignoring this can make you pay much more than you should.
In Brazil, some credit modalities practice very high rates. Always check the Central Bank’s credit statistics to see the average rates practiced by modality — they are updated monthly. Generally, the most expensive categories tend to be:
- Credit card revolving credit: historically one of the highest in the market
- Overdraft: also very high
- Non-payroll personal credit: intermediate, but still expensive
- Payroll credit: tends to be lower due to payroll deduction
- Real estate financing: usually the lowest
Why does this matter? Because a high-interest debt grows much faster than a low-interest one. If you have 500 reais on the credit card revolving and pay only the minimum, the outstanding balance can double in a few months. Understanding this helps prioritize which debts to tackle first.
Step 3: Choose a Payment Strategy
There are two main approaches to paying off debts, each with its advantages:
Avalanche (focus on the highest interest)
You list the debts from the highest to the lowest interest rate and direct any extra money to the one with the highest interest, paying the minimum on the others.
- Advantage: mathematically more efficient — you pay less interest in total
- Disadvantage: it may take longer to “see results” if the larger debt is big
Snowball (focus on the smallest balance)
You list the debts from the smallest to the largest total balance and eliminate them one by one.
- Advantage: generates motivation by quickly paying off smaller debts
- Disadvantage: may cost more in total interest if the smaller debts have low rates
| Strategy | Best For | Attention Point |
|---|---|---|
| Avalanche | Those who want to save on interest | Requires more patience |
| Snowball | Those who need quick motivation | May cost more in total |
There is no universal answer. The best method is the one you will stick to. If motivation is your weakness, the snowball method may be more effective in practice.
Step 4: Negotiate — You Have More Power Than You Think
Many people are afraid to call the bank or the creditor company, but negotiation is one of the most powerful tools for those with little money. Creditors prefer to receive something rather than nothing.
Where and how to negotiate:
- Directly with the creditor: Call, go to the branch, or use digital channels. Explain your situation and ask about special conditions, installment plans, or discounts for upfront payment.
- Renegotiation fairs: The Central Bank, in partnership with financial institutions, periodically promotes Desenrola Brasil and similar initiatives, offering special conditions for renegotiating debts of negative or low-income individuals. Check if there is an active program in 2026 by consulting the official website of the Central Bank or the federal government.
- Consumidor.gov.br platform: Allows you to file complaints and negotiate directly with participating companies, free of charge and mediated.
- Procon: In cases of negotiation difficulty, the Procon in your city can act as a mediator.
Practical tip: before negotiating, know exactly how much you can pay per month. Do not agree to a deal that will leave you without essentials. An installment plan you can honor is better than a discount that will lead to new default.
Step 5: Cut Expenses Without Torturing Your Life
With little money left, every real freed up is fuel to pay off debts. The goal is not to live in total deprivation — that is unsustainable — but to identify where there is real room for cuts.
Questions that help:
- Which paid subscriptions do you use less than once a week?
- How many times a month do you eat out for convenience (not for real pleasure)?
- Do you have any service contracted in duplicate (two streaming services with similar content, for example)?
- Is there any bill that can be reduced with a simple call (cell phone plan, internet)?
Small cuts add up and make a difference. If you free up 150 reais per month and direct everything to the debt with the highest interest, in a year, that’s 1,800 reais more amortized — not to mention the interest you stopped paying.
If you want to delve into this topic, also read: Save money every month without complicating life.
Step 6: Increase Income — Even If It’s Little
Cutting expenses has a physical limit. Increasing income, in theory, does not. Obviously, this is not simple — if it were, everyone would do it. But it’s worth exploring accessible options:
- Sale of unused items: clothes, electronics, furniture. Online platforms make this easier.
- Occasional informal work: odd jobs, freelancing, delivery services, among others, depending on your skills and availability.
- Monetization of skills: private lessons, crafts, organization services, etc.
- Review of work benefits: check if you are entitled to any unclaimed benefit (transportation voucher, medical assistance, profit sharing, FGTS in specific situations).
Every extra amount should have a defined destination before it reaches your account: pay the priority debt.
Step 7: Build a Minimal Cushion — Even While Owing
It seems counterintuitive to save money while in debt, but there is a practical reason: without any reserve, any unforeseen event (an unexpected bill, a health emergency) will make you resort to expensive credit again — and you’re back to square one.
The general recommendation in financial education is to have at least a small emergency cushion before accelerating debt repayment. The exact amount depends on your situation, but even 500 to 1,000 reais saved in an easily accessible (and yielding) account, like a remunerated account linked to the CDI, already reduces the risk of relapse.
To understand how to start saving even with little, this article can help: How to invest 100 reais per month consistently.
The Way Out Is Gradual — And That’s Normal
Getting out of debt with little money doesn’t happen in a month. It happens over months or years, depending on the size of the problem. What changes when you start using a method is the direction: instead of the debts growing, they start to decrease. This reversal, as small as it may seem at first, is the most important change.
Review your plan every 30 days. Celebrate each debt paid off. Adjust what isn’t working. And above all, don’t give up in the face of a bad month — unforeseen events happen and are part of the process.
Discipline doesn’t need to be perfect. It needs to be consistent.
This content is for educational purposes only and does not constitute investment advice, financial consultancy, or personalized legal advice. Each financial situation is unique. For decisions about debts, credit, or investments, consult a qualified professional or an advisor registered with the CVM (Securities and Exchange Commission).
