DEBT BONDAGE

DEBT BONDAGE (or bonded labour) is an arrangement whereby a person is forced to pay off a loan with direct labor in place of currency, over an agreed or obscure period of time. When the debtor is then tricked or trapped into working for very little or no pay, or when the value of their work is significantly greater than the original sum of money borrowed, some consider the arrangement to be a form of unfree labour or debt slavery. It is similar to peonage, indenture or the truck system.

The Legal Definition

Debt bondage is classically defined as a situation when a person provides a loan to another and uses his or her labour or services to repay the debt; when the value of the work, as reasonably assessed, is not applied towards the liquidation of the debt, the situation becomes one of debt bondage.