In the current Brazilian tax scenario, the growing judicialization of relations between private individuals and the State has generated significant liabilities in the form of court-ordered payments (precatórios), defined as debts owed by the Federal Government, states, and municipalities recognized by final court decisions.
Faced with the exponential increase in these commitments and the structural limitations of the public budget, Credit Rights Investment Funds (FIDCs), notably those backed by court-ordered payments, have emerged as an instrument for promoting liquidity, with a significant legal and economic role.
Recent developments in Brazilian tax policy, coupled with growing concern about the volume of court orders for mandatory court-ordered payments, have created a challenging scenario for the federal government, states, and municipalities. Nonetheless, for the financial sector, particularly investment funds, a strategic opportunity arises: acquiring court-ordered payments at a discounted price.
The current legal and economic landscape has shown a growing burden of judicial expenses for the federal government. According to data from the National Treasury[1], obligations related to court-ordered payments and small-value claims (RPVs) will exceed R$100 billion as early as 2025, with projections reaching R$116.3 billion by 2027. More recently, the stock of court-ordered payments reached R$ 130.83 billion at the end of 2024, representing a significant increase of 54.79% over the previous year. This amount, which is constantly rising, puts pressure on compliance with the new fiscal framework and makes it inevitable that fiscal rules will have to be revised by 2026 at the latest.
This scenario is directly related to the expiration of the exceptional authorization granted by the Federal Supreme Court in 2023[2], which allowed the Federal Government to temporarily exclude a significant portion of the court-ordered debt payments from the primary spending cap (ADI 7064 and ADI 7047). This possibility of budgetary flexibility ends in 2026, which will require, as of 2027, the full reintegration of these obligations into the Federal Government’s tax planning, with a significant impact on the available fiscal space.
The transition poses considerable fiscal risk and, at the same time, pressures the Executive to seek containment measures, such as renegotiating the accounting classification of court-ordered payments or presenting a new constitutional amendment proposal (PEC) that reconfigures the current regime. However, there is no magic solution; the volume of court-ordered payments is structurally high and is likely to persist in the short and medium term.
In this context, investment funds are positioned as relevant players in the acquisition of judicial assets. The growing need for liquidity on the part of creditors and the budgetary uncertainty regarding payment terms create an environment conducive to discount negotiations.
This asymmetry of interests, with creditors willing to advance receivables on one side and investors with an appetite for risk and a long-term vision on the other, consolidates court-ordered payments as an alternative class of financial assets.
In addition, court-ordered payments have attributes that make them particularly attractive to certain types of funds: they are liquid, certain, and enforceable credits, backed by a final and unappealable court decision. Despite the slowness in the release of funds by the Federal Government, States, and Municipalities, the risk of substantial default is practically nonexistent, given the nature of public debt.
From a legal perspective, the assignment of judicial payment orders is supported by articles 286 to 298 of the Civil Code, whereby the consent of the public debtor is not required, but notification is required for full effectiveness. The legal modeling of transactions must comply with the guidelines imposed by Central Bank Resolution No. 4,656/2018, especially with regard to structured funds (FIDCs), as well as compatibility with the rules of the Brazilian Securities and Exchange Commission (CVM). The structuring of these transactions therefore requires a multidisciplinary approach involving specialized lawyers, financial advisors, and asset managers.
In this scenario, investment funds that are properly structured to operate with judicial payment orders will be well positioned to capture value through the acquisition of assets at a significant discount, given that the combination of fiscal uncertainty, high judicialization, and budgetary pressure creates fertile ground for strategic opportunities in this segment.
[1] Treasury publishes General Balance Sheet of the Federal Government for 2024 — Ministry of Finance
[2] https://valor.globo.com/brasil/noticia/2025/03/14/precatorios-avancam-e-busca-por-solucao-pode-ser-antecipada.ghtml
Disponível em: https://www.migalhas.com.br/depeso/440918/fundos-de-investimento-e-oportunidades-estrategicas-em-precatorios
Autor: Alex De Andrade Lira • email: alex.lira@ernestoborges.com.br
