{"id":14238,"date":"2021-04-30T18:37:00","date_gmt":"2021-05-01T00:37:00","guid":{"rendered":"https:\/\/www.lexingtonlaw.com\/blog\/?p=14238"},"modified":"2025-05-14T15:37:01","modified_gmt":"2025-05-14T21:37:01","slug":"debt-jubilee","status":"publish","type":"post","link":"https:\/\/www.lexingtonlaw.com\/blog\/news\/debt-jubilee.html","title":{"rendered":"What is a debt jubilee?"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"1500\" height=\"500\" src=\"https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/couple-papers-debt-jubilee-happy.jpg\" alt=\"A couple happily throws papers into the air.\" class=\"wp-image-14239\" srcset=\"https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/couple-papers-debt-jubilee-happy.jpg 1500w, https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/couple-papers-debt-jubilee-happy-1100x367.jpg 1100w, https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/couple-papers-debt-jubilee-happy-768x256.jpg 768w\" sizes=\"(min-width: 767px) 600px, calc(100vw - 35px)\" \/><\/figure>\n\n\n\n<div class=\"quick-answer\">\n<h2>A debt jubilee is when a country or large organization cancels debt and clears it from the public record.<\/h2>\n<\/div>\n\n\n\n<p>A debt jubilee is when a country or large\norganization cancels debt and clears it from the public record. Simply put,\nit\u2019s large-scale debt forgiveness. Some economists believe in enacting a\njubilee as a method of preventing a depression, while others believe in more\nmoderate approaches, such as direct-to-consumer stimulus checks.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"1500\" height=\"650\" src=\"https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/debt-jubilee.png\" alt=\"Debt Jubilee (noun): When a country cancels debt and clears it from the public record.\" class=\"wp-image-14240\" srcset=\"https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/debt-jubilee.png 1500w, https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/debt-jubilee-1100x477.png 1100w, https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/debt-jubilee-768x333.png 768w\" sizes=\"(min-width: 767px) 600px, calc(100vw - 35px)\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-might-cause-a-debt-jubilee\">What Might Cause a Debt Jubilee?<strong><\/strong><\/h2>\n\n\n\n<p>When debt-fueled spending is the catalyst for\nstimulating the economy during hard times, concern rises over long-term\neconomic stability. Historically, calls for a debt jubilee have occurred when\nnations have teetered on the edge of an economic depression.&nbsp;<\/p>\n\n\n\n<p>The conditions in which a debt jubilee may occur\nare similar to those that would call for stimulus checks. The following\nconditions may increase the likelihood of debt jubilee policies:<\/p>\n\n\n\n<ul><li>Increasing gaps in wealth<\/li><li>Sizable consumer debt<\/li><li>Mass bankruptcy<\/li><li>A public health crisis<\/li><li>Widespread job loss&nbsp;<\/li><li>Sinking stocks<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-would-a-debt-jubilee-look-like-in-america\">What Would a Debt Jubilee Look Like in America?<strong><\/strong><\/h2>\n\n\n\n<p>Countries have implemented large-scale debt relief in the past to stimulate the economy. For example, Iceland <a href=\"https:\/\/www.theguardian.com\/business\/economics-blog\/2012\/aug\/21\/iceland-debt-relief-lessons-eurozone\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">wrote off and subsidized massive amounts of mortgage debt<\/a> after the country was hit particularly hard by the Great Recession in late 2008.&nbsp;<\/p>\n\n\n\n<p>Debt jubilee was an <a href=\"https:\/\/www.marketplace.org\/2020\/04\/02\/covid-19-debt-jubilee-forgiveness-easing\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">ancient practice<\/a> carried out in Babylonia and Syria, and the concept of complete debt annulment isn\u2019t necessarily feasible in modern-day America. However, some large-scale government-initiated debt relief practices in recent history are the closest equivalent we\u2019ve seen. For example, American businesses and corporations implemented debt jubilee relief efforts such as US veteran bonuses during the Great Depression.<\/p>\n\n\n\n<p>For a debt jubilee to happen in America today, banks would need to write off significant amounts of <a href=\"https:\/\/www.lexingtonlaw.com\/blog\/loans\/consumer-debt-statistics-2019.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">consumer debt<\/a>\u2014either student, credit card or mortgage debt or a combination of these\u2014and erase it from credit reports. Because of this, many see debt jubilee as a modern method of redistributing equity and resources while fighting against monopolies and the extreme elite.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-a-debt-jubilee-mean-for-consumers\">What Does a Debt Jubilee Mean for Consumers?<strong><\/strong><\/h2>\n\n\n\n<p>The goal of a debt jubilee in America would be to restore Americans\u2019 ability to pay taxes and enjoy more disposable income by freeing them from crippling debt. A debt jubilee may also open up the conversation for what the ideal debt system looks like in America. Many are already advocating for a more just and equitable debt system, including practices such as:<\/p>\n\n\n\n<ul><li><strong>Individual Voluntary Arrangements (IVAs):<\/strong> An alternative to declaring bankruptcy that involves a contractual agreement with creditors of a payment plan for unsecured debts.<\/li><li><strong>Reduced stigmatization of bankruptcy:<\/strong> The view that bankruptcy is a viable option rather than a shameful one, and that sometimes outside factors are out of someone\u2019s control.<\/li><li><strong>Debt forgiveness for poorer countries:<\/strong> The refusal to exploit other nations and the ability to arrive at a mutual understanding with them to maintain peaceful relations.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"1500\" height=\"931\" src=\"https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/modern-debt-jubilee-efforts.png\" alt=\"Modern debt jubilee efforts may include: individual voluntary arrangements (IVAs), reduced stigmatization of bankruptcy and debt forgiveness for poorer countries.\" class=\"wp-image-14241\" srcset=\"https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/modern-debt-jubilee-efforts.png 1500w, https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/modern-debt-jubilee-efforts-1100x683.png 1100w, https:\/\/www.lexingtonlaw.com\/blog\/wp-content\/uploads\/2020\/07\/modern-debt-jubilee-efforts-768x477.png 768w\" sizes=\"(min-width: 767px) 600px, calc(100vw - 35px)\" \/><\/figure>\n\n\n\n<p>While our expert team at Lexington Law can\u2019t guarantee debt cancellation, we <em>can <\/em>help you take steps to get your credit in better shape. Explore our <a href=\"https:\/\/www.lexingtonlaw.com\/credit-repair-services\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">credit repair<\/a> services to start your journey toward better financial health today.&nbsp;<\/p>\n\n\n\n<p><strong><em><a href=\"https:\/\/lexingtonlaw.com\/disclaimer\" target=\"_blank\" aria-label=\"undefined (opens in a new tab)\" rel=\"noreferrer noopener\">Note:<\/a><\/em><\/strong><em> Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>While historically a debt jubilee has involved total widespread cancellation of debt, a modern version may be viable\u2014if all the right conditions apply.<\/p>\n","protected":false},"author":63,"featured_media":14239,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[531],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v18.1 (Yoast SEO v18.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is a debt jubilee and what might cause it?<\/title>\n<meta name=\"description\" content=\"While 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