Debt Life Line

There was barter.

John grows cattle, Bill is a potter. John’s wife wants some nice new-kitchen ware so Bill is approached and is offered the hind of a cow in return for a full set of plates and drinking cups. Bill needs meat and accepts. The deal is done and everyone is happy. That’s keeping it simple.

No credit – just a straight swap.

Shell Money has taken a number of forms during the history of the human race and their commercial activities. The Chinese introduced the first medium of exchange in the form of shells. The cowry shell. No doubt because of its allure, glossy and yellow, different from the usual brown and white of the more common variety. This medium was introduced around 1200BC.

Coin surfaced, once again in China, around 1,000BC generally with a hole in the middle so that they could be hung on a thread and not become lost.

500BC, around the time of Alexander The Great, saw the introduction of silver coins bearing impressed images such as gods and heads of emperors. Silver was utilised because of its rarity at that time.

Paper Money. Money in a form other than metals started with leather money and progressed to paper money. It is generally accepted that the first Bank Note was produced and issued by the Bank of Norway in 1311.

Rum. In the early settlement of New South Wales, rum was the ‘coin’ of exchange.

Irrespective of the form money has taken it has always represented a given “value”. Gold became the benchmark of currency when introduced by the Bank of England in 1816.

Now today, we actually exchange money by digital means – out of ATMs and internet transfers. Give some thought to how little actual “cash” in coin or notes you handle these days.

Capital. We all talk about having capital, improving our capital position and the like but what does it mean and where does the term come from? The better definition is:

“The money, property, and other valuables which collectively represent the wealth of an individual”

Now apply some lateral thought and imagine what most things you own are made up of…..

• Metals
• Timber
• Glass
• Plastics

Capital derives from lands and mining.

Consideration. Few transactions are legally valid without an exchange between the borrower and the lender of consideration. Consideration is the giving of one thing in exchange for another. The value of the consideration is given has no relevance beyond it being “adequate” and may simply be the exchange of a written contract.

Debt. The transaction has been completed. You have received the goods either eaten them or are wearing them, using them or have disposed of them.

Unfortunately the debt remains or at least some of it. But, what type of debt is it? Yes, debts come in types – like colours although it doesn’t range through the colours of the rainbow. When you are in debt and really having trouble paying it back it is very important to identify the type of debt you are dealing with.

What then is debt?

“Monies lent, paid, had and received, due on an account stated for work or labour. Or, for the price of goods and services supplied and rendered – whether verbal or written (express or implied). Or, upon contracts of record”.

Active debt – monies that are owing to you by someone else.

Passive debt – what you owe to someone else.

Liquid debt – a debt that can be enforced immediately.

Hypothecary debt – debt that is due at a future time, subject to a condition such as a lien, a

doubtful debt. A debt that is uncertain.

Unsecured debt – a debt that had no conditions over property goods or chattels, applied

to it at the time of granting.

Secured debt – a debt that has conditions and is subject to property repossession in default.

Debts are discharged in various ways, but principally by payment.

Debt remedies. Remedy is a name used to explain an action used in debt recovery. Most remedies attract damages, sometimes nominal damages but will more than likely incur:

Interest, legal fees or both.