Debt is anything owed, especially a sum of money that one person owes to another. A person who owes a debt is called a debtor, and the one to whom it is owed is the creditor. If the debtor is unwilling or unable to pay the debt, the creditor may bring suit to recover the money. If the court finds that the debt is owed, and if the debtor fails to pay, the creditor may appeal to the sheriff for an execution of judgment. This gives the creditor the right to seize enough property of the debtor to pay the debt and the costs of the process. But there are exceptions as to what may be seized. This law varies in different states, provinces, and territories.
In a special type of debt called secured debt, the debtor promises that, if the debt is not paid on time, the creditor may seize specified property from the debtor before a suit is brought. If the value of the property is not enough to pay the entire debt, the creditor may then sue the debtor for the remaining amount. Most people purchase such expensive items as homes and automobiles through secured debt agreements.
Time limits on collection of debts.
The courts ordinarily state that debtors should pay their debts, even though the creditor does not demand payment. But if the creditor makes no effort to collect the money within a certain number of years, the debt becomes barred by a statute of limitations and can no longer be collected.
Penalties for debts.
In ancient times, a debtor was handed over to the mercy of his creditors to become a slave. This was true in Greece and Rome, among the Israelites, and among the Saxons in England. Later, prison terms became the usual punishment, and thus no money was recovered. Early American settlers included many fugitives from debtors’ prisons.
