Debt

Debt, in law, obligation, enforceable by legal action, to make payment of money. In modern law the term debt has no precisely fixed meaning and may be regarded essentially as that which one person legally owes to another. Under common law, however, an action for debt was a lawsuit undertaken for the express purpose of recovering a precise sum of money. If the amount owed could not be precisely determined without a trial, the creditor had to resort to other types of lawsuits. Lawsuits for the collection of debts under modern statutory systems of procedure may be divided for convenience of discussion into several categories, depending on the nature of the debt. If the debt arises out of an ordinary business or commercial transaction, the creditor's remedy against the debtor for failure to pay is to bring an action for breach of contract; for certain usual types of breaches of contract, such as the failure to pay a negotiable instrument or to pay for goods purchased, highly simplified procedures are often provided. When the debt is secured by a mortgage on the debtor's property, the creditor's remedy when the debtor fails to pay an instalment of interest or principal (the actual money lent) is foreclosure of the mortgage. If the debt, regardless of how it arose originally, is owed because of the judgment of a court, the judgment creditor may call upon the bailiff to assist in collecting the amount from the debtor's property by attachment or garnishment. Imprisonment of debtors, once frequent, is now usually considered too drastic a remedy, except where there has been fraud, false pretences, concealment of property from pursuit by a judgment creditor, or wilful failure to pay wages.