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The History Of Debt Recovery

The History Of Debt Recovery

Debt collection is a practice that is as old as money itself. For as long as currency has existed, people have been borrowing and loaning money. When that money can’t be returned, someone has to collect on the debt. A skilled debt recovery lawyer can walk a debtor or creditor through the tangled web of debt laws. Debt laws are so complex because they are based on thousands of years of history while also attempting to be much more fair and humane than past laws. In the past, debt laws ran a gamut from very lenient to very harsh.

Ancient Greece

In a manner of speaking, Ancient Greece did not even have a bankruptcy law. If someone owed money or goods that he could not repay, then that man, his wife, servants, and children were forced into slavery. They had to work in this debt slavery until the creditor had recouped the value of their losses through manual labour. The terms of the slavery differed based on the city-states. Certain city-states would limit the period of slavery to five years. Also, debt slaves were given protection against death or injury. The debtor’s servants, however, were sometimes sold into slavery for their entire lifetimes.

The History Of Debt Recovery

The Torah

In the Torah or the Old Testament, Mosaic Law decreed that the debts of all Hebrews were forgiven every seventh year. This was called a Sabbatical year. The debts of “gentiles” were, however, not forgiven. The Year of Jubilee is a year that follows the forty-ninth year or seven Sabbatical years. In a Year of Jubilee, all debt is forgiven, even that of foreigners. Debt slaves were also released in a Year of Jubilee.

The Quran

In the Quran, debt was handled in a somewhat more modern way. The Quran states that a creditor must allow a debtor time to repay his debts. If he is experiencing a tough time economically, the creditor must wait until the debtor is in a better financial situation.

Renaissance England

The first known piece of legislation concerning debts in England is the Statute of Bankrupts 1542. The statute treats debtors as criminals because they have, in effect, stolen money. The law aims to prevent debtors from escaping England without repaying their debts. In 1813, the Insolvent Debtors Act stated that debtors could be jailed. However, they could request release after two weeks if they pledged that their possessions were no more than £20. However, if one of the creditors disagreed with this, the debtor had to stay in prison.

As you can see, the way debt is handled has changed dramatically to the contemporary system. It is to the benefit of the debtor and creditor alike that the harsh laws are no longer in use. Now, the law is meant to be humane and fair, as well as ensuring that someone repays his or her debt. The harsh punishments of the past were harsh and they did not result in the creditor getting his or her money back. The punishment may be less now. However, you still need someone to help you navigate the laws.

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