Debt refers to an unpaid promise of payment.
The Bible refers to the matter of personal debt and deals with it in a matter of ways. Beginning with the Old Testament, loans and debts formed part of the economy. Loans could be made for a period of no more than six years (the interval between Sabbath years), upon which loans to fellow believers were forgiven. Debts to foreigners were excused from this release. This system of credit was revealed by God as a means to prevent poverty, but was dependent on one's obedience.
In cases (prior to the next Sabbath year) where debts were owed and could not be repaid, it was possible for persons to become indentured servants in order to work off their debts, which prevented individuals from falling into bankruptcy. The book of Proverbs makes clear that the rich rule over the poor, and the borrower is the servant of the lender. Because of this, individuals are also discouraged from pledging collateral for another person's loan.
The New Testament discusses further the issue of debt, sometimes in a wider sense. In the Lord's Prayer, Jesus instructed believers to "forgive us our debts, as we forgive us our debtors". The reference is towards forgiving actions of sin, rather than monetary debt.
It is virtually impossible to go through life without incurring some personal debt. Such debt is commonly generated through taking out loans, often for a house or a car. Credit cards are another source of debt. Where a debt cannot be paid in a specified time, interest is often added to the amount originally owed (the principal). Until the Great Depression, home loan practices were more consistent with the laws of Deuteronomy, in that the maximum term of a home loan was limited to 5-10 years. By the late 1930s however, changes to Federal legislation allowed for 30-year loans. This had the effect of increasing home ownership levels, but also increasing the amount of personal debt to a high degree.
The United States has the largest national debt in the world, 10 times the size of Canada's. Regardless of this, Barack Obama borrowed more in the month of February 2011 ($223 billion) than George W. Bush did during the entire 2007 budgetary year ($163 billion).