Overindebtedness and Resistance
Authors: Sabaté Muriel Irene 
Published: June 2020

During the first two decades of the 21st century, a wide anthropological literature has tackled the social nature of debt and credit under contemporary capitalism, with its increasing centrality linked to financialization processes that involve the commodification of different kinds of debt. Indebtedness appears in different modalities and reaches different scales: that of individuals or households (consumption credit, mortgages), that of entrepreneurs and firms (microcredits, corporate debt), and that of national economies and public administrations (sovereign debt).

In some cases, indebtedness evolves into overindebtedness as borrowers experience persistent difficulties in keeping up with loan repayments, due to a variety of factors, including poor financial decisions, lack of transparency or fraud on the creditors’ side, insufficient consumer protection, structural factors that incentivize recklessness on both the borrowers’ and the lenders’ part, and so on. For critical scholars, acts of borrowing should not be seen as the result of rational choice, but as a behavior naturalized by a neoliberal regime of accumulation where credit plays a central role, and where indebtedness is a precondition for social reproduction, especially among the poor. Although operational definitions of the notion of overindebtedness tend to focus on objective indicators and normative statements, a number of authors advocate for the exploration of its subjective dimension: when is debt experienced as a burden?

Overindebtedness, on the one hand, has an impact on material living conditions, as it leads to economic precariousness, impoverishment, and dispossession. On the other hand, it also has political effects: if power relations between creditors and debtors are taken into account, it entails the disciplining and disempowerment of borrowers, who are forced to adopt a neoliberal ethos.

In the face of excessive indebtedness, in cases where debts are unpayable and/or are perceived as illegitimate, debtors may react in a variety of ways, giving way to different forms of resistance, including the refusal to repay. The latter usually entails certain consequences, on moral terms—as defaulters are not fulfilling the obligation to repay—and/or in the form of debt enforcement. The politics of such resistances are to be understood as manifestations of opposition against a “debt economy” in which the most basic functions of household and national economies are only attainable through indebtedness. Occurrences of resistance to overindebtedness with explicitly political aims include debt audits, debt cancellation campaigns, different forms of collective disobedience, calls for changes in legislative frameworks, and experimentation with alternative credit-lending institutions.

However, there are few cases where borrowers refuse to repay their debt for a conscious, politically motivated reason. In many other situations, their intentionality is not an emancipation from debt, but the attainment of more sustainable conditions for repayment, for instance, negotiating debt restructuration, prioritizing certain financial obligations over others, and so on.

Apart from analyzing, comparing, and classifying existing resistances, both before and after the 2008 financial crisis as an important historical milestone, the scholarly literature on the topic also explores the possible conditions necessary for future resistances and a potential society free from financial speculation and exploitative debts.