History of debt relief

In ancient Greece and Rome the laws were more creditor-friendly and debt cancellation was one of the major demands of the poor, only occasionally implemented by the government.

Debts were often cancelled by a new ruler issuing a clean slate decree after assuming the throne or following a natural or man-made calamity.

[3] The debt remissions checked the power of elites, who would otherwise amass great fortunes of land cultivated by serfs, and ensured that enough free labourers were available to serve in the army and for public work duties.

When it started spreading in the Late Period, the rulers of Egypt regulated it and a number of debt remissions are known to have occurred during the Ptolemaic era, including the one whose proclamation was inscribed on the Rosetta Stone.

[16] According to Plutarch, interest-bearing debts were made illegal by the democratic government of Megara in the 6th century BCE while the creditors were forced to return the collected interest.

This was treated as an extreme populist measure by Greek sources,[17] and historians are divided as regards the historicity of these events, considered to reflect later anti-democratic political thought.

[14] Appian mentions an attempt by praetor Asellio to revive the old law prohibiting the taking of interest in 89 BC which led to his murder, presumably by the creditors.

Augustus instituted cessio bonorum, allowing debtors to voluntarily surrender their property to creditors and thereby avoid personal arrest and loss of legal standing (infamia).

[27] The government accused the Buddhist monasteries (which had become major lenders to the peasantry by the 6th century CE) of issuing high-interest loans.

[25] The question of debt relief was particularly important in the writings of early modern canon lawyers and theologians, frequently members of the School of Salamanca,[29] which were sensible to the needs of indigent debtors.

[30] If the real debt relief (called remissio debiti) remained rarely promoted due to the binding of the contractual engagement and was more considered as a gift of the creditor,[31] the right to defer the payement (dilatio debiti) was thought as a temporary and more useful relief in case of extreme necessity or risks of important damages.