Brazil's insolvency regime has undergone a material revision. Amendments to the country's insolvency legislation. This took effect in early 2025, alter how creditors participate in restructuring proceedings. How the administrador judicial (court-appointed administrator) operates. Additionally, how creditor priority is determined when a debtor's assets are distributed. International companies with Brazilian subsidiaries, trade receivables, or loan exposures should treat this development as requiring immediate attention.
The 2025 amendments to Brazil's insolvency legislation reshape creditor rights across recuperação judicial (judicial restructuring proceedings) and falência (liquidation proceedings). Foreign creditors must now file proof of debt within stricter timelines and engage directly with the restructuring plan approval process. Companies with active or potential exposure to Brazilian insolvency proceedings should review their positions before the compliance window closes.
This alert identifies which business categories are affected, outlines the relevant thresholds, and sets out the immediate actions international companies should take now.
What changed and when it took effect
The amendments introduced several structural changes to Brazil's insolvency legislative regime. First, the role of the administrator has been expanded. The administrator now holds broader investigative powers over the debtor's pre-insolvency transactions. This matters for creditors because asset recoveries – and therefore distributions – depend directly on what the administrator uncovers.
Second, the rules governing the creditors' meeting have been revised. Voting thresholds for restructuring plan approval have shifted. A plan may now be confirmed by a qualified majority across defined creditor classes, even where one class votes against it. This so-called cross-class confirmation mechanism mirrors concepts seen in other major insolvency regimes but represents a significant departure from prior Brazilian practice.
Third, the proof of debt process carries tighter deadlines. Foreign creditors filing claims must meet Brazilian-law requirements precisely. Documents must be apostilled and translated by a sworn translator. Failure to comply within the filing window results in subordination of the claim – meaning the creditor drops in priority behind compliant creditors.
Fourth, the liquidator's powers during falência proceedings have been reinforced. The liquidator may now challenge asset disposals made in a defined period before the commencement of insolvency proceedings. The challenge window has been extended under the amended legislation, increasing exposure for counterparties in recent transactions with Brazilian entities.
The amendments apply to all proceedings commenced on or after the effective date in early 2025. Proceedings already underway at that date continue under the prior rules, unless the supervising court orders otherwise.
Who is affected and the compliance threshold
The amendments affect any creditor – domestic or foreign – with a financial claim against a Brazilian debtor that is subject to insolvency proceedings. The practical impact is concentrated in several business categories.
Foreign lenders and bondholders holding debt instruments governed by Brazilian law, or where the debtor is a Brazilian entity, face new proof of debt requirements. Claims denominated in foreign currency must be converted at the exchange rate applicable on the date of the commencement of proceedings.
Trade creditors – suppliers of goods and services to Brazilian companies – must monitor debtor financial health more actively. The amended creditors' meeting rules mean that a restructuring plan can now be imposed on dissenting trade creditors if the required majority across other classes approves it.
Investors in Brazilian corporate debt, whether through direct lending or structured vehicles, must assess whether their instruments carry security interests that survive insolvency. The treatment of collateral under the amended legislation has been clarified in ways that affect enforcement strategy.
Counterparties to recent transactions with Brazilian debtors should review whether those transactions fall within the extended look-back period now available to the liquidator. This applies to asset sales, loan repayments, and security arrangements concluded in the period preceding the insolvency filing.
The compliance deadline for filing proof of debt in active proceedings is determined by the court's publication of the creditor notice in the official gazette. The window is typically 15 days from that publication for proceedings already under the new rules. Missing this window results in automatic subordination of the claim.
For a detailed assessment of your creditor position in Brazilian insolvency proceedings, contact us at info@ferrazwhitmore.com.
Immediate actions for international companies
International companies with Brazilian exposure should take the following steps without delay.
- Audit Brazilian counterparty exposure. Identify all Brazilian entities in your supply chain, loan book, or investment portfolio that may be approaching financial distress. The earlier a creditor acts, the more options remain available.
- Review proof of debt readiness. Confirm that your documentation – contracts, invoices, loan agreements – is apostilled and available for sworn translation on short notice. Delays in document preparation are the most common reason foreign creditors miss the filing deadline.
- Assess transaction exposure. If your company sold assets to, received payment from, or took security over a Brazilian entity in the past two to three years, review whether those transactions now fall within the liquidator's extended challenge window.
- Engage in the restructuring plan process. Under the amended creditors' meeting rules, passive creditors risk having a plan imposed on them. Active participation – including voting and, where warranted, challenging the plan – is the only way to protect your position.
- Coordinate cross-border strategy. Where the Brazilian insolvency intersects with parallel proceedings in another jurisdiction, review recognition and enforcement options. Brazil's insolvency legislation now contains provisions on cross-border cooperation that may support or limit your strategy depending on the circumstances.
For companies managing insolvency risk across the Americas, our parallel alert on insolvency law developments in the United States provides a useful comparative reference.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our insolvency and restructuring practice covers Brazil and the wider Latin American region, combining civil law expertise with cross-border enforcement strategy. As a law firm in Brazil-facing matters, we assist foreign lenders, trade creditors. Additionally. Institutional investors in protecting their positions in Brazilian insolvency proceedings. from proof of debt filing through to creditors' meeting participation and restructuring plan challenges. Our team has experience before Brazilian courts and in coordinating parallel proceedings in multiple jurisdictions. Engaging a lawyer with Brazil-specific insolvency experience at an early stage is the most effective way to preserve creditor value. To discuss your exposure and build a response strategy, contact us at info@ferrazwhitmore.com.
For a full overview of our insolvency and restructuring services in Brazil, including our approach to judicial restructuring and liquidation proceedings, visit our dedicated practice page.
Where creditor disputes escalate beyond the insolvency process, our corporate disputes practice in Brazil provides complementary litigation and arbitration support.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.
Author: Marco Reyes, International Counsel, Americas & Iberian Markets
Marco Reyes is an International Counsel at Ferraz & Whitmore advising clients on legal matters across Latin American jurisdictions and Iberian markets. He specialises in commercial litigation, investment disputes, and cross-border contract enforcement in civil law systems.
Published: March 19, 2026