precatorio

A precatorio is a legal term originating from Portuguese and Spanish legal systems, primarily used in Brazil. It refers to a court order for payment of a debt owed by the public treasury to an individual or entity. This debt arises from a final and unappealable court judgment where the government, at any level (federal, state, or municipal), is found liable to pay a sum of money.

When a lawsuit concludes and the government is ordered to pay, but it does not have immediate funds allocated for this specific purpose, a precatorio is issued. This document formally registers the debt and places it in a queue for payment. The order specifies the amount due, the debtor (the government entity), and the creditor (the individual or company).

The payment of precatorios is subject to specific budgetary and chronological rules. There are annual quotas established by law for different types of creditors, with priority often given to the elderly or those with serious illnesses. The waiting period for payment can be lengthy, sometimes spanning several years, depending on the volume of precatorios and the financial capacity of the debtor government.

Due to the delays, precatorios can be sold or ceded by the original creditor to third parties, often at a discount. This practice allows creditors to receive a portion of their due amount sooner, while the buyer of the precatorio assumes the right to receive the full payment from the government later. The legal framework governing precatorios aims to ensure that public debts are settled in an orderly and fiscally responsible manner.