Debt relief

Debt relief or debt cancellation is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations.

From antiquity through the 19th century, it refers to domestic debts, in particular agricultural debts and freeing of debt slaves. In the late 20th century, it came to refer primarily to Third World debt, which started exploding with the Latin American debt crisis (Mexico 1982, etc.). In the early 21st century, it is of increased applicability to individuals in developed countries, due to credit bubbles and housing bubbles.

International debt relief

First World War reparations

War debt payments by World War I Allies to the U.S. had been suspended in 1931—only Finland paid in full—and American public opinion demanded repayments resume as a condition of U.S. postwar aid. Germany had suspended its reparations payments due under the 1919 Versailles Treaty and payable to Britain, France and others, as well as loans due to the United States. Chancellor Konrad Adenauer decided that permanent good will required their resumption. The 1953 Agreement on German External Debts, which resumed German's war reparations, is a notable example of international debt relief.[1][2]

Less Developed Country Debt

Debt relief for heavily indebted and underdeveloped developing countries was the subject in the 1990s of a campaign by a broad coalition of development NGOs, Christian organizations and others, under the banner of Jubilee 2000. This campaign, involving, for example, demonstrations at the 1998 G8 meeting in Birmingham, was successful in pushing debt relief onto the agenda of Western governments and international organizations such as the International Monetary Fund and World Bank. The Heavily Indebted Poor Countries (HIPC) initiative was ultimately launched to provide systematic debt relief for the poorest countries, whilst trying to ensure the money would be spent on poverty reduction.[3]

The HIPC programme has been subject to conditionalities similar to those often attached to International Monetary Fund (IMF) and World Bank loans, requiring structural adjustment reforms, sometimes including the privatisation of public utilities, including water and electricity. To qualify for irrevocable debt relief, countries must also maintain macroeconomic stability and implement a Poverty Reduction Strategy satisfactorily for at least one year. Under the goal of reducing inflation, some countries have been pressured to reduce spending in the health and education sectors. While the World Bank considers the HIPC Initiative a success, some scholars are more critical of it.[4]

The Multilateral Debt Relief Initiative (MDRI) is an extension of HIPC. The MDRI was agreed following the G8's Gleneagles meeting in July 2005. It offers 100% cancellation of multilateral debts owed by HIPC countries to the World Bank, IMF and African Development Bank.[5]

Arguments against debt relief

Opponents of debt relief argue that it is a blank cheque to governments, and fear savings will not reach the poor in countries plagued by corruption. Others argue that countries will go out and contract further debts, under the belief that these debts will also be forgiven in some future date. They use the money to enhance the wealth and spending ability of the rich, many of whom will spend or invest this money in the rich countries, thus not even creating a trickle-down effect. They argue that the money would be far better spent in specific aid projects that actually help the poor. They further argue that it would be unfair to third-world countries that managed their credit successfully, or do not go into debt in the first place. That is, it actively encourages third-world governments to overspend in order to receive debt relief in the future. Others argue against the conditionalities attached to debt relief. These conditions of structural adjustment have a history, especially in Latin America, of widening the gap between the rich and the poor, as well as increasing economic dependence on the global North.

Personal debt relief

Origins

Debt relief existed in a number of ancient societies:

  • Debt forgiveness is mentioned in the Book of Leviticus (a Judaeo-Christian scripture), in which God councils Moses to forgive debts in certain cases every Jubilee year – at the end of Shmita, the last year of the seven year agricultural cycle or a 49-year cycle, depending on interpretation.
  • This same theme was found in an ancient bilingual Hittite-Hurrian text entitled "The Song of Debt Release".[6]
  • Debt forgiveness was also found in Ancient Athens, where in the 6th century BCE, the lawmaker Solon instituted a set of laws called seisachtheia, and which canceled all debts and retroactively canceled previous debts that had caused slavery and serfdom, freeing debt slaves and debt serfs.
  • In addition, the Qur'an (the Muslim scripture) supports debt forgiveness for those who are unable to pay as an act of charity and remission of sins for the creditor. The injunction is as follows:

If the debtor is in difficulty, grant him time till it is easy for him to repay. But, if ye remit it by way of charity, that is best for you if ye only knew.

— Qur'an 2:280 [7]

Contemporary

In the United States of America for the years preceding the Financial crisis of 2007–2008, non-housing personal debt (auto loans, credit cards, student loans, etc.) rose significantly from approximately $2.05 trillion at the start of 2003 to a peak of $2.71 in Q4 of 2008. It was not until Q3 of 2012 that unsecured personal debt reached this level again. Since that time, unsecured personal debt has risen steadily to $3.76 trillion at the end of the third quarter of 2017.[8] The other large change in unsecured personal debt is that an increasing portion of it is now student loan debt, from 12% in Q1 of 2003 to 53% in Q3 of 2017.

The increasing size of the non-housing personal debt market and ease with which one can obtain personal credit has led to some consumers falling behind on payments. As of Q3 2017, student loans have the highest rates of serious delinquency (90 or more days delinquent) with approximately 9.6% of all student loan debt falling into this bucket. Credit card debt and auto loan debt have serious delinquency rates of 4.6% and 2.4% respectively.[9]

When consumers begin to fall behind on payments, they have several options to discharge the debt, either in full or in part. The first method is declaring bankruptcy, which has the immediate effect of stopping any payments made to creditors. In the United States, the two primary avenues of bankruptcy for an individual are Chapter 13 bankruptcy and Chapter 7 bankruptcy. Another option is to consolidate these debts into a single loan, commonly known as debt consolidation. Debt relief, on an individual level, refers mainly to the negotiation for a reduction of a debt by either the consumer or a debt settlement agency. Through this arrangement, consumers agree to pay the creditor a fixed amount of money (generally a discount on their outstanding debt) either in a lump sum or under a payment plan. The debt settlement industry has had significant regulatory scrutiny since its inception with changes implemented in 2010 by the FTC.[10] As the disposition of personal debt is a highly regulated industry, consumers are urged by the FTC and other trade organizations to do significant research and find an independent credit counselor to guide them through the process.[11]

Tax treatment

In US tax law, debt forgiven is treated as income, as it reduces a liability, increasing the taxpayer's net worth. In the context of the bursting of the United States housing bubble, the Mortgage Forgiveness Debt Relief Act of 2007 provides that debt forgiven on a primary residence is not treated as income, for debts forgiven in the 3-year period 2007–2009. The Emergency Economic Stabilization Act of 2008 extended this by 3 years to the 6-year period 2007–2012.

Bankruptcy and non-recourse loans

The primary mechanism of debt relief in modern societies is bankruptcy, where a debtor who cannot or chooses not to pay their debts files for bankruptcy and renegotiates their debts, or a creditor initiates this. As part of debt restructuring, the terms of the debt are modified, which may involve the debt owed being reduced. In case the debtor chooses bankruptcy despite being able to service the debt, this is called strategic bankruptcy.

Certain debts can be defaulted on without a general bankruptcy; these are non-recourse loans, most notably mortgages in common law jurisdictions such as the United States. Choosing to default on such a loan despite being able to service it is called strategic default.

Alternatives

Historical

Sick men's ward in the Marshalsea prison
The sick men's ward at Marshalsea debtors' prison.

If a debt cannot be or is not repaid, alternatives that were common historically but are now rare include debt bondage – including debt peonage: being bound until the debt is repaid; and debt slavery, when the debt is so great (or labor valued so low) that the debt will never be repaid – and debtors' prison.

Debt slavery can persist across generations, future generations being made to work to pay off debts incurred by past generations. Debt bondage is today considered a form of "modern day slavery" in international law,[12] and banned as such, in Article 1(a) of the United Nations 1956 Supplementary Convention on the Abolition of Slavery. Nevertheless, the practice continues in some nations. In most developed nations, debts cannot be inherited.

Debtors' prison has been largely abolished, but remains in some forms in the US, for example if one fails to make child support payments.

Contemporary

In modern times, the most common alternatives to debt relief in cases where debt cannot be paid are forbearance and debt restructuring. Forbearance meaning that interest payments (possibly including past due ones) are forgiven, so long as payments resume. No reduction of principal occurs, however.

In debt restructuring, an existing debt is replaced with a new debt. This may result in reduction of the principal (debt relief), or may simply change the terms of repayment, for instance by extending the term (replacing a debt repaid over 5 years with one repaid over 10 years), which allows the same principal to be amortized over a longer period, thus allowing smaller payments.

Personal debt that can be repaid from income but if it is not being repaid may be obtained via garnishment or attachment of earnings, which deduct debt service from wages.

Inflation

Inflation, the reduction in the nominal value of currency, reduces the real value of debts. While lenders take inflation into account when they decide the terms of a loan, unexpected increases in the rate of inflation cause categorical debt relief.

Inflation has been a contentious political issue on this basis, with debasement of currency a form of or alternative to sovereign default, and the free silver in late 19th century America being seen as a conflict between debtor farmers and creditor bankers.

Inflation, in an economy that is growing, is caused by more money being introduced into circulation by the central bank. If the amount of tender remains constant, a currency grows or falls at the rate of the reserves that back it. The global prevalence of fractional reserve banking has caused most currencies to decline in value consistently. In a non-fractional (fully backed) reserve system, the growth of a currency is equal to the growth (or decline) of the assets backing it, fees are charged in an upfront manner, and money is worth by what it is backed.

Fractional reserve banking has resulted in a transfer of wealth from the holders of currency to investors. Under fractional reserve banking the money supply is allowed to be increased whenever new interest-bearing loans are issued and is often constrained by a reserve ratio, which mandates that banks hold a portion of the wealth they lend out at interest in the form of real reserves. Many nations are in the process of eliminating reserve ratios.

Debt relief in art

Debt relief plays a significant role in some artworks: in the play The Merchant of Venice by William Shakespeare, c. 1598, the heroine pleads for debt relief (forgiveness) on grounds of Christian mercy. In the 1900 novel The Wonderful Wizard of Oz, a primary political interpretation is that it treats free silver, which engenders inflation and hence reduces debts. In the 1999 film Fight Club (but not the novel on which it is based), the climactic event is the destruction of credit card records – dramatized as the destruction of skyscrapers – effecting debt relief. The 2015 television series, Mr. Robot, follows a group of hackers whose main mission is to cancel all debts by taking down one of the largest corporations in the world, E Corp.

See also

References

  1. ^ William N. Goetzmann; K. Geert Rouwenhorst (2005). The Origins of Value: The Financial Innovations that Created Modern Capital Markets. Oxford University Press. pp. 336–38.
  2. ^ Timothy W. Guinnane, "Financial Vergangenheitsbewältigung: The 1953 London Debt Agreement" (Economic Growth Center, Yale University, 2004) online
  3. ^ Harold J. Johnson (1998). Developing Countries: Status of the Heavily Indebted Poor Countries Hipc Debt Relief Initiative. DIANE Publishing. pp. 2–10.
  4. ^ Jürgen Kaiser (22 February 2016). "Back to square one". D+C, development and cooperation.
  5. ^ International Monetary Fund (2009). Regional Economic Outlook, October 2009: Sub-Saharan Africa - Weathering the Storm. p. 41.
  6. ^ Harms, William (1996-02-01). "Linking ancient peoples". The University of Chicago Chronicle. 15 (10). Retrieved 2009-02-26.
  7. ^ "Islamic Relief Worldwide - Faith inspired action" (PDF).
  8. ^ "The Center for Microeconomic Data - FEDERAL RESERVE BANK of NEW YORK". www.newyorkfed.org. Retrieved 2017-11-28.
  9. ^ "Total Household Debt Increases, Delinquency Rates of Several Debt Types Continue Rising - FEDERAL RESERVE BANK of NEW YORK". www.newyorkfed.org. Retrieved 2017-11-28.
  10. ^ "FTC Issues Final Rule to Protect Consumers in Credit Card Debt". Federal Trade Commission. 2010-07-29. Retrieved 2017-11-28.
  11. ^ "Choosing a Credit Counselor". Consumer Information. 2012-11-01. Retrieved 2017-11-28.
  12. ^ The Bondage of Debt: A Photo Essay, by Shilpi Gupta
1990 in India

Events in the year 1990 in the Republic of India.

Andrew Gwynne

Andrew John Gwynne (born 4 June 1974) is a British Labour Party politician and has been the Member of Parliament (MP) for Denton and Reddish in Greater Manchester since 2005, replacing the retiring Andrew Bennett.

He was re-elected in 2015 with a majority of 10,511. He was again re-elected in 2017 with an increased majority of 14,077, representing a 12.7% increase since the 2015 general election (63.5% share of the vote). Following the 2017 general election, Gwynne was appointed as Shadow Secretary of State for Communities and Local Government. Gwynne does not hold responsibilities for Housing in England, as John Healey serves as Shadow Secretary of State for Housing, as Jeremy Corbyn has indicated that if Labour form the next government, they will create a separate government department for housing.

He was appointed to the Shadow Cabinet as Shadow Minister without Portfolio by Labour leader Jeremy Corbyn in October 2016 and then became Campaigns and Elections Chair in February 2017. He is a member of the Unite Trade Union, the Co-operative Party and the Christians on the Left.

Center for Global Development

The Center for Global Development (CGD) is a nonprofit think tank based in Washington, D.C. and London that focuses on international development.

It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and Nancy Birdsall. Birdsall, the former Vice President of the Inter-American Development Bank and former Director of the Policy Research Department at the World Bank, became the Center's first President. Lawrence Summers was unanimously elected in March 2014 by the CGD Board of Directors to succeed founding Board Chair Edward Scott, Jr., on May 1, 2014.CGD was ranked the 13th most prominent think tank in the international development sphere by University of Pennsylvania's "2015 Global Go To Think Tank Index Report". In 2009, Foreign Policy Magazine's Think-Tank Index listed CGD as one of the top 15 overall think-tanks in the USA. CGD's stated mission is "to reduce global poverty and inequality by encouraging policy change in the United States and other rich countries through rigorous research and active engagement with the policy community. The Center considers itself to be a "think and do" tank, with an emphasis on producing research that is channeled into practical policy proposals.CGD is well known for leading debt-relief programs, specifically in Nigeria and Liberia. CGD Vice President Todd Moss first proposed the Nigerian debt buy-back, which resulted in the Paris Club of rich nations forgiving 60% of $31 billion of debt. Former CGD senior fellow Steve Radelet advised Liberian President Ellen Johnson Sirleaf and her senior advisors on debt relief and aid coordination.

CGD is also known for creating the program called advance market commitments to encourage vaccine development for specific diseases. The G7 endorsed the approach and the Gates Foundation and five countries gave $1.5 billion to create a vaccine against strains of pneumonia.In cooperation with Foreign Policy, CGD has published the Commitment to Development Index since 2003. The annual index ranks countries based on how their foreign aid, trade, migration, investment, environment, security and technology policies encourage global development.The Center for Global Development in Europe was established in October 2011 with the aim of engaging with and learning from policymakers, academics, and researchers in Europe, and bringing the CGD blend of evidence-led, high-quality research and engagement to European policymaking and engagement about development. "CGD in Europe" research initiatives include "Europe Beyond Aid", Development Impact Bonds, and Illicit Financial Flows.

In November 2013, CGD purchased a new headquarters that includes a 170-seat state-of-the-art conference center, a 60-seat boardroom/ideas lab, and a multimedia studio.

Conditionality

In political economy and international relations, conditionality is the use of conditions attached to the provision of benefits such as a loan, debt relief or bilateral aid. These conditions are typically imposed by international financial institutions or regional organizations and are intended to improve economic conditions within the recipient country.

Credit counseling

Credit counseling (known in the United Kingdom as Debt counselling) is commonly a process that is used to help individual debtors with debt settlement through education, budgeting and the use of a variety of tools with the goal to reduce and ultimately eliminate debt. Credit counseling is most often done by Credit counseling agencies that are empowered by contract to act on behalf of the debtor to negotiate with creditors to resolve debt that is beyond a debtor's ability to pay. Some of the agencies are non-profits that charge at no or non-fee rates, while others can be for-profit and include high fees. Regulations on credit counseling and Credit counseling agencies varies by country and sometimes within regions of the countries themselves. In the United States, individuals filing Chapter 13 bankruptcy are required to receive counseling.

DATA

Debt, AIDS, Trade, Africa (DATA) was a multinational non-government organization founded in January 2002 in London by U2's Bono along with Bobby Shriver and activists from the Jubilee 2000 Drop the Debt campaign.

DATA was created for the purposes of obtaining equality and justice for Africa through debt relief, adjusting trade rules which burden Africa, eliminating the epidemic of AIDS in Africa, strengthening democracy, furthering accountability by the wealthiest nations and African leaders, and transparency towards the people. In 2007, in the United States, DATA and Bono were jointly awarded the National Constitution Center's 2007 Liberty Medal for their groundbreaking efforts to address the AIDS crisis and extreme poverty in Africa.

Start-up funds came from the Bill & Melinda Gates Foundation, financier George Soros, and technology entrepreneur Edward W. Scott.In 2007, DATA and the ONE Campaign decided to join forces, and, in January 2008, they formally merged under the name ONE.DATA received support from the Christian rock / alternative rock bands Switchfoot and Third Day.

Debt of developing countries

The debt of developing countries refers to the external debt incurred by governments of developing countries, generally in quantities beyond the governments' ability to repay. "Unpayable debt" is external debt with interest that exceeds what the country's politicians think they can collect from taxpayers, based on the nation's gross domestic product, thus preventing it from ever being repaid. The debt can result from many causes.

Some of the high levels of debt were amassed following the 1973 oil crisis. Increases in oil prices forced many poorer nations' governments to borrow heavily to purchase politically essential supplies. At the same time, OPEC funds deposited and "recycled" through western banks provided a ready source of funds for loans. While a portion of borrowed funds went towards infrastructure and economic development financed by central governments, a portion was lost to corruption and about one-fifth was spent on arms.

Debt relief order

Debt relief orders (DROs) are a new form of insolvency measure in the United Kingdom. They were introduced under Chapter 4 of the Tribunals, Courts and Enforcement Act 2007. A DRO is a simplified, quicker and cheaper alternative to bankruptcy in the United Kingdom, suitable for debtors who have few or no assets (less than £1000 and not homeowners) and little disposable income (less than £50 per month). It is possible to apply for a DRO without attending court and the fee is £90. The fee may be paid by instalments prior to applying for the order.

Everest College

Everest College is a system of colleges in the United States, and with Wyotech, make up Zenith Education. It was until 2015 a system of for-profit colleges in the United States and the Canadian province of Ontario, owned and operated by Corinthian Colleges, Inc. In 2015, Corinthian ceased operating and filed for bankruptcy. While most Corinthian-owned colleges were closed in early 2015, Educational Credit Management Corporation (ECMC), a non-profit, took ownership of more than half of Corinthian Colleges' campuses, including many Everest College campuses. As of 2016, 19 ECMC-owned Everest locations remain in operation. At least 10 more campuses were closed or in the process of closing in 2016.The Canadian branches were not purchased by ECMC and remain closed.

Following significant downsizing, Everest graduates still express concerns that their degrees are worthless.In 2016, Corinthian Colleges was compelled to pay more than $1.1 billion to the State of California, in part for defrauding thousands of students. The judge ordered restitution of $820 million for students and civil penalties of $350 million. According to the California State Attorney General "For years, Corinthian profited off the backs of poor people—now they have to pay. This judgment sends a clear message: There is a cost to this kind of predatory conduct."More than a thousand former Everest College students have been afforded debt relief by the US government because of Everest's questionable business practices. Thousands more may get debt relief.

Farmers' suicides in India

In 2014, the National Crime Records Bureau of India reported 5,650 farmer suicides. The highest number of farmer suicides were recorded in 2004 when 18,241 farmers committed suicide. The farmers suicide rate in India has ranged between 1.4 and 1.8 per 100,000 total population, over a 10-year period through 2005. There are accusations of states manipulating the data on farmer suicides.India is an agrarian country with around 70% of its people depending directly or indirectly upon agriculture. Farmer suicides account for 11.2% of all suicides in India. Activists and scholars have offered a number of conflicting reasons for farmer suicides, such as monsoon failure, high debt burdens, government policies, public mental health, personal issues and family problems.

Financial health management

Financial health management (FHM) is a debt relief method designed to help consumers handle their debt issues in both the short and long term.

In the short term, an FHM company helps an indebted consumer leave debt by using an established debt relief method. In the long-term, an FHM company provides resources to help its clients change their financial behavior and maintain their “financial health” in the years after they leave debt.

To reach this goal, a company provides resources, usually online, that can help both past and present clients better manage their finances. These resources might include savings tips, online budgeting tools or educational articles about credit and debt. These items are offered to encourage positive financial habits and help people avoid returning to debt in the future.

Freedom Debt Relief

Freedom Debt Relief is a US debt resolution company. It is currently based in San Mateo, California and is a wholly owned subsidiary of Freedom Financial Network, a financial service company also headquartered in San Mateo. The company states that it has more than 2,000 employees.

Heavily indebted poor countries

The heavily indebted poor countries (HIPC) are a group of 37 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank.

Joseph Desha

Joseph Desha (December 9, 1768 – October 11, 1842) was a U.S. Representative and the ninth governor of the U.S. state of Kentucky. After the revocation of the Edict of Nantes, Desha's Huguenot ancestors fled from France to Pennsylvania, where Desha was born. Eventually, Desha's family settled near present-day Gallatin, Tennessee, where they were involved in many skirmishes with the Indians. Two of Desha's brothers were killed in these encounters, motivating him to volunteer for "Mad" Anthony Wayne's campaign against the Indians during the Northwest Indian War. Having by then resettled in Mason County, Kentucky, Desha parlayed his military record into several terms in the state legislature.

In 1807, Desha was elected to the first of six consecutive terms in the U.S. House of Representatives. A Democratic-Republican, he was considered a war hawk, supporting the War of 1812. In 1813, he volunteered to serve in the war and commanded a division at the Battle of the Thames. Returning to Congress after the war, he was the only member of the Kentucky congressional delegation to oppose the unpopular Compensation Act of 1816. Nearly every other member of the delegation was defeated for reelection after the vote, but Desha's opposition to the act helped him retain his seat. He did not seek reelection in 1818, and made an unsuccessful run for governor in 1820, losing to John Adair. By 1824, the Panic of 1819 had ruined Kentucky's economy, and Desha made a second campaign for the governorship almost exclusively on promises of relief for the state's large debtor class. He was elected by a large majority, and debt relief partisans captured both houses of the General Assembly. After the Kentucky Court of Appeals overturned debt relief laws favored by Desha and the majority of the legislature, the legislators abolished the court and created a replacement court, to which Desha appointed several debt relief partisans. The existing court refused to acknowledge the legitimacy of the move, and during a period known as the Old Court – New Court controversy, two courts of last resort existed in the state.

Although popular when elected, Desha's reputation was damaged by two controversies during his term. The first was his role in the ouster of Horace Holley as president of Transylvania University. While the religious conservatives on the university's board opposed Holley because they considered him too liberal, Desha's opposition was primarily based on Holley's friendship with Henry Clay, one of Desha's political enemies. After Desha bitterly denounced Holley in an address to the legislature in late 1825, Holley resigned. Desha's reputation took a further hit after his son, Isaac, was charged with murder. Partially because of Desha's influence as governor, two guilty verdicts were overturned. After the younger Desha unsuccessfully attempted suicide while awaiting a third trial, Governor Desha issued a pardon for his son. These controversies, along with an improving economy, propelled Desha's political foes to victory in the legislative elections of 1825 and 1826. They abolished the so-called "Desha court" over Desha's veto, ending the court controversy. In a final act of defiance, Desha threatened to refuse to vacate the governor's mansion, although he ultimately acquiesced without incident, ceding the governorship to his successor, National Republican Thomas Metcalfe. At the expiration of his term, he retired from public life and ultimately died at his son's home in Georgetown, Kentucky, on October 11, 1842.

Loan waiver

A loan waiver is the waiving of the real or potential liability of the person or party who has taken out a loan through the voluntary action of the person or party who has made the loan. Examples of loan waivers include the Stafford Loan Forgiveness program in the United States and the Agricultural Debt Waiver and Debt Relief Scheme in India.

Paris Club

The Paris Club (French: Club de Paris) is a group of officials from major creditor countries whose role is to find co-ordinated and sustainable solutions to the payment difficulties experienced by debtor countries. As debtor countries undertake reforms to stabilize and restore their macroeconomic and financial situation, Paris Club creditors provide an appropriate debt treatment.

Paris Club creditors provide debt treatments to debtor countries in the form of rescheduling, which is debt relief by postponement or, in the case of concessional rescheduling, reduction in debt service obligations during a defined period (flow treatment) or as of a set date (stock treatment).The Paris Club was created gradually from 1956, when the first negotiation between Argentina and its public creditors took place in Paris. The Paris Club treats public claims (that is to say, those due by governments of debtor countries and by the private sector), guaranteed by the public sector to Paris Club members. A similar process occurs for public debt held by private creditors in the London Club, which was organized in 1970 on the model of the Paris Club as an informal group of commercial banks meet to renegotiate the debt they hold on sovereign debtors.

Creditor countries meet ten times a year in Paris for Tour d'Horizon and negotiating sessions. To facilitate Paris Club operations, the French Treasury provides a small secretariat, and a senior official of the French Treasury is appointed chairman.Since 1956, the Paris Club has signed 433 agreements with 90 different countries covering over US$583 billion.

Personal bankruptcy

Personal bankruptcy law allows, in certain jurisdictions, an individual to be declared bankrupt. Virtually every country with a modern legal system features some form of debt relief for individuals. Personal bankruptcy is distinguished from corporate bankruptcy.

Populares

The Populares (; Latin: populares, "favoring the people", singular popularis) were a grouping in the late Roman Republic who favored the cause of the plebeians (the commoners).

Concerned for the urban poor, the Populares supported laws regarding the provision of a grain dole for the poor by the state at a subsidized price. As such, they wanted reforms which helped the poor, particularly redistributing land for the poor to farm and debt relief. At times, the Populares also supported the extension of Roman citizenship to Rome's Italic allies.

The Populares are regarded in modern scholarship as in opposition to the Optimates, who are identified with the conservative interests of the patricians (the aristocracy) and supported the Senate, which represented its interests. The collapse of the higher class's ability to manage and govern Rome helped them become a party. New competition and campaigning started to help support the masses and the Populares were born as a result.

Shōchō uprising

The Shōchō uprising (正長の土一揆 Shōchō no Do Ikki or Shōchō no Tsuchi Ikki) was one of the many armed rebellions in Japan during the Muromachi Period and the first launched by the peasants. It occurred between August and September of the year 1428, which in the old Japanese calendar was the 1st year of Shōchō, and is also known as the Shōchō no Tokusei Ikki, the Shocho debt cancellation revolt.

As social anxiety increased as a result of the death of Ashikaga Yoshimochi, of bad harvests due to poor weather since the last year, and of an epidemic of three-day disease (likely cholera ), the bashaku of Otsu and Sakamoto in Ōmi Province demanded a debt moratorium.

This revolt spread and extended to all of Kinai as peasants throughout the region who were struggling to repay their debts undertook "independent debt relief" by attacking and looting sake merchants, storehouse money brokers, and temples. The grounds for the so-called "independent debt relief" is supposed to be "daigawari no tokusei", or debt relief at the time when power passes from one shōgun to another.

The shogunate was hard-pressed by this and set about quelling it under the orders of the kanrei Mitsuie Hatakeyama. The head of the samurai-dokoro, Akamatsu Mitsusuke, also sent troops. However, the strength of the insurrection did not diminish but rather it even invaded Kyoto in September and also spread to Nara.

The monk Jinson recorded the following entry about the uprising in the Daijoin nikki mokuroku, his daily journal. "The first year of Shocho, in the ninth month, an uprising of commoners broke out. They claimed debt relief and went on to destroy wine shops, pawn shops, and temples which engaged in usury. They took anything they could lay their hands on, and cancelled the debts. Kanrei Mitsuie Hatakeyama suppressed this. There is nothing more than this incident to bring about the ruin of our country. This is the first time since the founding of Japan that an uprising of commoners ever occurred."In the end, the Muromachi shogunate did not release a debt cancellation order, but because proof of the farmers' debts had been destroyed during the looting, the "independent debt relief" had effectively achieved the same situation. Furthermore, Kōfuku-ji in Yamato Province formally cancelled debts and because it had turned almost all the territory in the province into its own shōen and exercised power as its shugo, these orders had official binding power and were implemented. An example of one such order is the Yagyū no Tokusei Hibun which was inscribed on a stone monument.

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