Legal Definition of Debt
A sum of money due by certain and express agreement.3 min read
In a less technical sense, it means a claim for money. In a still more enlarged sense, it denotes any kind of a just demand; such as the debts of a bankrupt.
Types of Debt
Debts arise or are proved:
- By matter of record, as judgment debts.
- By bonds or specialties.
- By simple contracts, where the quantity is fixed and specific, and does not depend upon any future valuation to settle it.
Debts can be divided into active and passive. By the former is meant what is due to us, by the latter, what we owe. By liquid debt, they understand one, the payment of which may be immediately enforced, and not one which is due at a future time, or is subject to a condition; by hypothecary debt is meant, one which is a lien over an estate and a doubtful debt, is one the payment of which is uncertain.
Discharge of Debt
Debts are discharged in various ways, but principally by payment.
In payment of debts, some are to be paid before others. In cases of insolvent estates; first, in consequence of the character of the creditor; e.g., debts due to the United States are generally to be first paid; secondly, in consequence of the nature of the debt; e.g., funeral expenses and servants' wages, which are generally paid in preference to other debts.
Debt as a Remedy
Remedies: The name of an action used for the recovery of a debt, though damages are generally awarded for the detention of the debt; however, in most instances these are merely nominal.
The subject will be considered with reference:
- To the kind of claim or obligation on which this action may be maintained.
- The form of the declaration.
- The plea.
- The judgment.
Debt is a more extensive remedy for the recovery of money than assumpsit or covenant, for it lies to recover money due upon legal liabilities, such as for money lent, paid, had and received, due on an account stated for work and labor, or for the price of goods, and a quantum valebant thereon or upon simple contracts, express or implied, whether verbal or written, or upon contracts under seal, or of record, or by a common informer, whenever the demand for a sum is certain, or is capable of being reduced to certainty. It also lies to recover money due on, any specialty or contract under seal to pay money. This action lies on a record, or upon a judgment of a court of record or upon a foreign judgment. Debt is a frequent remedy on statutes, either at the suit of the party grieved, or of a common informer. Debt also lies, in the detinet, for goods; which action differs from detinue, because it is not essential in this action, as in detinue, that the property in any specific goods should be vested in the plaintiff, at the time the action is brought and debt in the debet and detinet may be maintained on an instrument by which the defendant is bound to pay a sum of money lent, which might have been discharged on or before the day of payment, in articles of merchandise.
When the action is on a simple contract, the declaration must show the consideration of the contract, precisely as in assumpsit; and it should state either a legal liability or an express agreement, though not a promise to pay the debt. When the action is founded on a specialty or record, no consideration need be shown unless the performance of the consideration constitutes a condition precedent, and performance of such consideration must be averred. When the action is founded on a deed, it must be declared upon, except in the case of debt for rent.