The term Debt originates from the Latin “Debita” which means “Obligation to pay”. A debt happens when a person, either a natural or legal person, takes on a great responsibility. Debts are made when the person to whom the loan is madeYou need some capital either to invest it or to yield it. The indebted person must pay off the total amount of the debt in a set time that is assigned according to several factors that can be, the amount, the trust, and the veracity and verification of what is going to be executed with that loan. Trade and the ability of man to exchange his goods for some type of payment, has generated any number of economic processes that have evolved in society since its inception as we learn how to improve our quality of purchase and sale. Debt for its part is a tool with which whoever buys can opt for a payment after the moment of exchange, that is, whoever buys, acquires the product but does not pay it, but after a set period, payment is made of the same.
Debts have a sense of scale that is at variance with the nature of the need for the loan, if it is a loan that is requested from a friend, relative or friend that does not require a contract and that on the contrary is only verbal It is called Private Debt, since no public regulatory body interferes with it. For its part, the public debtIt is the one acquired by countries that need a multimillion dollar loan to solve a certain problem with some speed, in order to achieve the stability of the country and generate resources to return it. It is important to note that to stop this type of debt, countries in those cases create financial organizations with certain characteristics of a stock exchange in order to speed up the passage of money between friendly and committed countries.
Debt has become some types of businesses and financing one tool very useful and essential for the growth of investment. Allied countries or organizations protect each other by going into debt, covering their backs in the event of a failure situation. One type of debt, the secured debt, which has a very important guarantee and which is not very positive and is risky is the Mortgage which consists of receiving money from the bank and this in exchange for the debt while it is canceled, it corresponds to a guarantee in the form of material goods such as a house, car, land, etc. On the other hand, there are unsecured debts, which do not have any guarantee, which if not canceled, legal actions can be taken against the debtor.
In addition, there are other types of debts such as moral debt that can be defined as the force that reason exerts on the will of an individual against a duty or value; it is a feeling that is not exercised by the state, society, or another entity. Therefore, there is the legal debt that alludes to a legal link between two parties, the debtor and the creditor, where one of these parties, the debtor, must comply with the cancellation of the benefit.
Referring to economic terms we can find types of doubts such as: external debt, internal debt, illegitimate debt, floating debt.
External debt is one that refers to the amount that a certain country owes to foreign territories.
Internal debt, is the sum of the national or public debt owned by a given country whose creditors are its own citizens.
Illegitimate debt, is the one that maintains that the foreign debt of a territory, used against the interests of the citizens of said territory, does not have the obligation to be canceled and its repayment may be demanded because the borrowers would have acted in bad faith, therefore that the contracts made are legally annulled.
Floating debt is part of the public debt that is contracted in the short term through bonds and bills by the government, which is continually renewed.
