Can I use my FGTS to pay off debts? Find out everything!

The default rate in our country is high, and one of the reasons is the lack of financial planning, along with the difficulties caused by the crisis. Therefore, using the FGTS to pay debts This could be an interesting option.

Summary with subtitles

Is it possible to use FGTS (Brazilian employee severance fund) to pay off debts?
How does the FGTS work?
When can I make a withdrawal?
Using FGTS funds to pay off debts;
How do I know if I have FGTS (Brazilian severance pay fund) to receive?
How can I use my FGTS (Brazilian employee severance fund) to pay off debts through prepayment?
I owe Caixa Econômica Federal (a Brazilian bank), can they seize my FGTS (Brazilian employee severance fund)?
Tips for paying off debts using FGTS (Brazilian employee severance fund);
Conclusion.

Is it possible to use FGTS (Brazilian employee severance fund) to pay off debts?

Yes, it is possible to use money from the Severance Indemnity Fund (FGTS) to pay off debts.

But before simply using the value, it's important to keep the following in mind:

Do your calculations and check the exact amount of the interest rates.

Next, compare whether it's worthwhile to use the funds from your FGTS account or if it's more advantageous to let the money accrue interest.

By the way, do FGTS accounts earn interest?

Yes, the FGTS (Brazilian Severance Indemnity Fund) is adjusted by the TR (Reference Rate) plus 3% per year, in addition to the possibility of an annual bonus payment.

However, the FGTS (Brazilian Severance Indemnity Fund) has been yielding less than savings accounts and other types of financial investments.

In other words, is it more worthwhile to pay bills with part of the benefit or to let it continue to accrue interest?

How does the FGTS work?

First of all, know that the FGTS It is the Severance Indemnity Fund (FGTS), which was created by the federal government with the purpose of forming a reserve for workers.

Each month, the employer must deposit the equivalent of 8% of the total gross salary payments received by the employee (salary, night shift allowance, overtime, among others).

In the case of an apprenticeship contract, the employer is required to deposit 2%.

It is worth noting that the employer has until the 7th of the month to make the payment.

Otherwise, he will have to pay interest and inflation adjustments, in addition to the employee's benefit amount.

And before talking about how to use the FGTS to pay debtsWhat is the money from the FGTS (Brazilian Severance Indemnity Fund) used for?

All workers' FGTS accounts are held at Caixa Econômica Federal, and the sum of the balances from all accounts results in a single total.

In this sense, the government uses the resource for urban infrastructure such as, for example, road paving, basic sanitation, and public housing.

Therefore, note that the funds in your FGTS account do not remain idle at Caixa Econômica Federal.

Despite this, in some specific circumstances, the worker can withdraw the funds independently of any government investment.

When can I make a withdrawal?

Well, it's important that you understand what these specific legal circumstances are that allow for the withdrawal of FGTS funds:

Termination of the contract;
Dismissal without just cause;
Termination due to bankruptcy;
Retirement or employee over 70 years of age;
Death of the worker;
Unemployed for three years;
In cases of serious illness;
Purchase of a home, settlement or amortization of debt, as well as the payment of some installments of a home loan.

Using FGTS (Brazilian employee severance fund) to pay off debts.

First of all, understand that the total amount in your FGTS account cannot be used to pay off debts.

Only a portion of what is made available through the birthday withdrawal option is used to organize your finances.

In other words, for you to use the FGTS to pay debtsTo withdraw funds on your FGTS (Brazilian employee severance fund), you must first request the anniversary withdrawal through the Caixa website or even via the FGTS app.

However, the procedure must be completed by the last day of the birth month in order for the withdrawal to be released this year.

Otherwise, the withdrawal will only be possible in 2022.

It's also worth mentioning that the birthday withdrawal is an optional feature.

If you do not request the withdrawal, you remain on the Termination Withdrawal system, and you will only receive the money if you are dismissed without just cause or when your contract is terminated.

That is, you will not be able to pay your debts using part of the benefit.

How do I know if I have FGTS (Brazilian severance pay fund) to receive?

Before understanding how the process of using the works FGTS to pay debtsIt is necessary to know the exact amount of your bill.

There are several ways to do this, such as, for example, in Caixa website.

Here's a simple step-by-step guide:

Enter your NIS/PIS number and select the "register password" option;
Read and accept all the terms and conditions, and fill in the fields with your personal information.
Create a password with up to 8 digits and log in to access your account.

To find your NIS/PIS number, check your printed FGTS statement, your Work Card, or even your Citizen Card.

On the other hand, you can also find out the balance of your account through the FGTS app, which is available for smartphones. IOS or Android.

Therefore, access the app, click on the "first access" section, read the agreement and accept it.

You will also need your NIS number; you must fill out a form and click "next".

Create your password and click to register in order to see the available balance in your account.

Another way to check to use the FGTS to pay debts It would be via SMS and email.

On your mobile phone, you can receive monthly updates regarding your balance, as well as all deposits made into your account.

Please note that the electronic message will replace the paper statement that is sent by mail every 2 months.

In addition, it's possible to receive the data via email.

Therefore, whatever your preference (receiving the statement by email or SMS), you need to register for one of the services through the website or app after creating your personal password.

You can even update your address to receive your statement in paper format, if you prefer.

Information about the birthday withdrawal

As mentioned, you need to request the birthday withdrawal in order to use it. FGTS to pay debts.

Therefore, understand that the birthday withdrawal works as follows:

Workers who decide to apply for an account have the option of making annual withdrawals from inactive accounts, accounts from previous jobs, or even from active accounts representing their current job.

Only a percentage is available for withdrawal, and the higher the total account balance, the lower the percentage withdrawn annually.

We have a content which clarifies all the details about this type of withdrawal, so we recommend visiting for more information.

How uUse your FGTS (Brazilian employee severance fund) to pay off debts through advance payments.?

And so that you don't have to wait until your birthday to withdraw the money, it's possible to access it in advance through a loan.

This is where the opportunity to use the arises. FGTS to pay debts.

You should access Caixa's internet banking and click on the "credit" section.

After that, select the periods and amounts you wish to receive in advance, and also provide your electronic signature for confirmation.

Done! The receipt will appear on your computer or mobile phone screen and the amount will be deposited into your checking account. See how simple it is?

Therefore, keep in mind that this is a line of credit that uses the balance of your FGTS account, in a kind of automatic debit.

Because of the payment security—that is, the company knows it will receive the money in the month of your birthday—interest rates are lower.

Despite this, there are fees, so it's essential that you check the CET (Total Effective Cost) of the transaction to ensure that it's worthwhile to prepay your debts.

And can this type of transaction only be done by Caixa?

No, most banks offer this type of service, which is called advance payment. FGTS to pay debts or a loan using FGTS (Brazilian employee severance fund).

It's worth noting that some banks have an integration with the Caixa app, making it even easier to obtain credit.

Therefore, the simulation process is similar: simply request the birthday withdrawal and then immediately apply for the loan.

As examples of institutions, we can highlight Banco do Brasil and Banco Pan.

I owe Caixa Econômica Federal (a Brazilian bank), can they seize my FGTS (Brazilian employee severance fund)?

No, no institution has the right to use FGTS funds to settle any debt.

Therefore, the bank cannot transfer the funds without your consent.

The assessment comes from the Brazilian Association of Consumer Protection Agencies (ProconsBrasil), which defines it as follows:

The total value of the FGTS account is completely different from other deposits.

Therefore, it should not be used automatically to cover debts related to overdrafts or credit card debt, for example.

Even if you take out a loan from Caixa and are unable to pay the installments, the bank cannot use your FGTS (Brazilian employee severance fund) money to pay off the debt without your permission.

In conclusion, know that regardless of any debt, this is money that is rightfully yours and can be used however you prefer.

Furthermore, you can redeem the amount through a loan and pay off your debt with Caixa!

Tips for paying off debts with FGTS (Brazilian employee severance fund)

First and foremost, it is of fundamental importance that you check the value that is in your FGTS account.

This way, you'll know exactly how much you can get through the birthday withdrawal, as well as the amount that can be withdrawn in advance.

Only by understanding the value you will have in hand will it be possible to structure your plan.

On the other hand, it's interesting that you List all your debts..

Indicate which company you owe money to, the amount, and the applicable interest rates.

If you are unsure exactly which companies you owe money to or the amount of your debts, simply visit the Serasa website and check the information. credit score.

Define whether the value obtained through anticipation could cover all your debts.

Otherwise, it is essential that you prioritize paying off debts with higher interest rates in order to prevent them from increasing even further, making repayment impossible.

This type of debt is usually related to overdrafts and revolving credit card debt, and can quickly snowball into a huge problem.

Finally, search negotiate your debts.

Analysis of the company's perspective for which you should:

Is it worth having outstanding payments?

Of course! Companies want to get paid, and that's why they partner with their customers to negotiate debts.

You need to contact the company and offer the deal in order to get special conditions.

Don't be afraid! Get informed and pay a fair amount to settle your debts.

Conclusion

To conclude our content, keep the following in mind:

In fact, using the FGTS to pay debts It's an interesting strategy for organizing finances.

However, we suggest that before receiving the money, you create a financial plan prioritizing the repayment of debts with higher interest rates.

Next, request the birthday withdrawal service and choose a good institution to make the advance payment.

Note that there are several companies to choose from, and you should analyze the interest rates of each one to select the best option.

With the money in hand, contact the creditors directly and propose a negotiation because when you seek an agreement, the interest rates may be lower.

The whole process should be done with patience and careful planning, good luck!

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Luciana Sampaio

September 28, 2021