WHAT CHANGED IN PERSONAL DEBT ENFORCEMENT SINCE ANCIENT TIMES?

Abstract

Debt default has various adverse effects on the parties of a loan transaction, namely the debtor, lender, market, and society. Many mechanisms have been developed for debt enforcement since ancient times. Unfortunately, the sanctions used in enforcement, especially for personal debts, have always been quite harsh. This paper evaluates the instruments used in personal debt enforcement. It presents that some sanctions used in ancient societies are still utilized in modern economies. While the traditional insolvency regulations focused only on protecting the lender by disregarding the humanitarian aspect, current laws also aim at the relief of defaulted individuals. Although there is no more death penalty and slavery, and are too few imprisonment practices today, the ancient instrument of seizing assets is still an essential sanction with some exemptions. Debt bondage is also not employed nowadays. However, confiscating the individuals’ future income may be considered a modern form of debt bondage.