When a Brazilian company fails to pay an invoice, foreign creditors may initially attempt to resolve the matter through emails, calls and commercial negotiations.
If those efforts do not produce payment, the creditor may need formal legal assistance in Brazil.
A foreign company can generally pursue a Brazilian debtor without opening a local subsidiary. The appropriate strategy depends on the available documents, the debtor’s financial situation and whether the obligation is disputed.
Confirm which Brazilian company owes the debt
The first step is to identify the correct legal entity.
Foreign creditors sometimes negotiate with a commercial brand or corporate group, while the invoice or contract identifies only one specific Brazilian company.
The following information should be confirmed:
- full corporate name;
- CNPJ number;
- registered address;
- identity of the contract signatory;
- company responsible for receiving the goods or services;
- company that issued purchase orders or made previous payments.
Proceedings against the wrong entity may delay recovery or make enforcement more difficult.
Preserve all evidence
The creditor should collect and preserve:
- signed contracts;
- commercial proposals;
- purchase orders;
- invoices;
- proof of delivery;
- service reports;
- emails and messages;
- payment promises;
- partial-payment records;
- acknowledgements of the debt.
A formally signed contract is useful, but it is not the only possible evidence.
The Brazilian Superior Court of Justice has recognized that invoices and other written documents may support a monitoring action, even when the invoice itself does not contain the debtor’s signature, depending on the complete evidentiary record.
Send a formal legal notice
Before filing a lawsuit, Brazilian counsel may send a formal notice requesting payment.
The notice may identify:
- the origin of the debt;
- the principal amount;
- contractual interest or penalties;
- the payment deadline;
- consequences of continued default;
- opportunity to negotiate a settlement.
A formal notice can help document the debtor’s default and demonstrate that the creditor attempted to resolve the matter.
If the debtor acknowledges the debt, the parties may negotiate an acknowledgement-of-debt agreement with instalments, penalties and guarantees.
Negotiate only with adequate protection
A new promise to pay does not necessarily improve the creditor’s position.
Any settlement should clearly define:
- total amount owed;
- payment dates;
- interest and monetary adjustment;
- consequences of late payment;
- acceleration of remaining instalments;
- guarantees;
- jurisdiction;
- responsibility for collection expenses.
The agreement should also be structured so that it can be enforced efficiently if the debtor defaults again.
Which lawsuit may be filed?
The procedure depends on the documents.
Direct enforcement
Direct enforcement may be possible when the creditor holds a document recognized as an enforceable instrument under the Brazilian Code of Civil Procedure.
The obligation must generally be certain, liquid and enforceable. The Code provides that enforcement is invalid when the extrajudicial instrument does not contain an obligation with those characteristics.
Monitoring action
A monitoring action may be appropriate when the creditor has written evidence of the debt but does not hold an instrument permitting immediate enforcement.
Invoices, purchase orders, emails and delivery documents may be relevant in this procedure.
Ordinary collection or breach-of-contract action
When the debtor disputes the agreement, delivery, amount or quality of performance, a broader lawsuit may be necessary.
The court may need to examine documents, witnesses or technical evidence before confirming the obligation.
What amounts may be claimed?
Depending on the contract and the circumstances, the creditor may seek:
- principal amount;
- contractual interest;
- late-payment penalties;
- monetary adjustment;
- damages caused by the breach;
- procedural expenses.
The Brazilian Civil Code establishes that a debtor who fails to perform an obligation may be responsible for losses, damages and consequences arising from default.
The calculation must be supported by the contract and financial records.
Can Brazilian courts locate or freeze assets?
After the legal requirements are met, enforcement measures may involve:
- bank accounts;
- vehicles;
- real estate;
- company receivables;
- financial investments;
- ownership interests;
- other assets belonging to the debtor.
Obtaining a judgment does not automatically guarantee recovery. The debtor must have assets or income available for enforcement.
An early assessment should therefore examine whether the company remains active, has known assets or is involved in judicial reorganisation.
What if the debtor is in judicial reorganisation?
When a Brazilian company enters judicial reorganisation, individual collection measures may be restricted.
The creditor may need to register or challenge the debt within the reorganisation proceeding.
The strategy depends on:
- date and origin of the debt;
- classification of the claim;
- status of the proceeding;
- deadlines established by the court;
- terms of the reorganisation plan.
Immediate review is important because procedural deadlines may affect the creditor’s rights.
Can the matter be handled from abroad?
Foreign creditors can generally manage the collection process remotely.
The company may:
- meet Brazilian counsel by videoconference;
- send documents electronically;
- issue a power of attorney;
- receive reports in English;
- approve settlements remotely;
- monitor proceedings without travelling to Brazil.
Foreign corporate documents may require an apostille, sworn translation or proof of the signatory’s authority.
What if there is already a foreign judgment?
A judgment issued abroad generally requires recognition before it can be enforced against assets located in Brazil.
The Superior Court of Justice explains that recognition is necessary for a foreign judicial decision to produce effects in Brazil.
Before litigating outside Brazil, the creditor should assess whether filing the original claim directly in Brazil may be more efficient.
Legal assistance for foreign creditors
Willian Nunes Advogados assists foreign companies when Brazilian customers, suppliers or business partners fail to comply with payment obligations.
The work may include:
- document analysis;
- debtor verification;
- formal legal notices;
- settlement negotiations;
- acknowledgement-of-debt agreements;
- judicial collection;
- enforcement against debtor assets;
- written reports in English.
Additional information is available through the pages concerning a debt collection lawyer in Brazil, commercial contract assistance and legal representation in Brazil.
Foreign creditors may submit the available documents through the contact page of Willian Nunes Advogados.
Each matter requires an individual assessment of the evidence, amount owed, debtor’s assets and applicable deadlines.
Frequently asked questions
Can we collect without a signed contract?
Possibly. Emails, invoices, purchase orders, delivery records and partial payments may help prove the debt.
Should we send another invoice?
A corrected or updated invoice may be useful, but it does not replace formal evidence or legal action when the debtor refuses to pay.
Can we negotiate instalments?
Yes. The settlement should contain clear deadlines, default consequences and adequate guarantees.
Can we freeze the debtor’s bank account?
Judicial attachment may be requested when the procedural requirements are satisfied.
Do we need to travel to Brazil?
Most commercial collection matters can be handled remotely through Brazilian legal counsel.
