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Legal Dictionary

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INDEBTEDNESS Indebtedness is the state of owing people money, or being indebted to them. For example, indebtedness occurs when someone takes out a mortgage, or finances a car. Most people cannot pay for a home or a car outright, and so they are indebted to the bank for the amount of the loan that was given to them. Using a credit card to buy such things as clothing, or to pay for a trip, results in indebtedness. Indebtedness is not the same as a failure to pay . Someone can be indebted to the bank because he owes the bank money, but his monthly payments are still current . Modern Debtors’ Prison The idea of debtors’ prison still exists, even though there are no longer brick-and-mortar buildings where people are locked away for their indebtedness. Modern debtors’ prison is a term sometimes used to refer to the practice of locking people up in a regular jail cell for their failures to pay criminal fines, or court-ordered child support. Early D