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obligation in services, money, or goods owed by one party, the debtor, to another, the creditor. When contested, debts are collected by a civil suit upon which the judge renders a judgment, and an execution is levied on the debtor's property. In ancient nations debt was associated with slavery because the insolvent debtor and his household were in many cases turned over to the creditor to perform compulsory services. In early Rome the insolvent was given into custody of the creditor for 60 days prior to his sale as a slave, subject to such treatment as pleased the creditor. That arrangement was mitigated in 494 B.C. by the first of the uprisings of the Roman people; turbulence in Rome afterward was to a large extent occasioned by the desire to restrain creditors. In Greece the reforms of SolonSolon
, c.639–c.559 B.C., Athenian statesman, lawgiver, and reformer. He was also a poet, and some of his patriotic verse in the Ionic dialect is extant. At some time (perhaps c.600 B.C.) he led the Athenians in the recapture of Salamis from the Megarians.
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 had a similar origin. In ancient Israel, every 50th year—the year of jubilee—Jewish debtors were freed and their obligations were canceled. Sumerian and Babylonian kings also periodically proclaimed jubilee periods when debts over seven years old were forgiven. Imprisonment for debt, which once crowded prisons, was ended in theory in England and the United States by laws enacted in the 19th cent. The laws of bankruptcybankruptcy,
in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most instances, to
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 are designed to apply the resources of debtors to their debts and thereafter to remove such legal obligations.


See D. Graeber, Debt: The First 5,000 Years (2011).

References in periodicals archive ?
Based on the above findings, the first hypothesis is rejected, because no significant relation was observed between the conditional conservatism and the cost of debt.
90%, respectively, as the relation between the cost of debt and the ratio of the expenses coverage and the size of the company is significant.
In order to test the second hypothesis, a regression model in which the cost of debt is a function of unconditional conservatism, the financial lever and the systematic risk of the company's shares was used.
This finding indicates a direct and significant relation between the cost of debt and level of unconditional conservatism and is consistent with the claim set forth in the second main hypothesis.
Based on the above findings, the second main hypothesis and the claim set forth therein, indicating a direct and significant relation between unconditional conservatism and cost of debt, are accepted with a reliability level of 95%.
Hypothesis 2: The cost of debt is likely to decrease, ceteris paribus, during the post-SOX period.
SPREAD = basis point spread over LIBOR inclusive of all fees, which is a proxy for cost of debt.
Since debt covenants and cost of debt are substitutes (that is, when debt covenants increase, interest rates decrease and vice versa), I expect SPREAD to have a negative relationship with COV.
Thus, the relative reduction in the risk premium on debt contracts is likely to be greater for smaller firms, and thus, I expect a greater reduction in the cost of debt issued during the post-SOX period for smaller firms.
Hypothesis 3: Small firms are more likely to have a greater relative reduction in the cost of debt after the passage of SOX than larger firms.