Paper short abstract:

Using citizenship as a conceptual frame, the paper demonstrates on empirical material from Czechia that the ability to handle debts forms a marker of participation in society, enabling the imposition of both moral and legal sanctions, delimiting who is (un)deserving and who should be given voice.

Paper long abstract:

Czechia has witnessed a rapid growth in household debt and the expansion of a legal system which has turned debt collection into an extremely profitable business for those representing creditors, offering limited protection to debtors. Consequently, nearly ten percent of the adult population is facing wage and property seizures, a situation in which they are deprived of several fundamental rights (property ownership, guarantee of adequate income, privacy rights, etc.) and often face economic precarity and poverty.

Presenting first findings from the research project “Constructing and Performing Citizenship through Debt in the Czech Republic”, our paper uses citizenship as a conceptual frame to investigate the social position and agency of debtors who experience difficulties repaying formal loans. Understanding debt as a technique of governance and discipline (Graeber 2014; Lai 2017) and citizenship as a legal and a social institution with multiple dimensions and hierarchies granting access to rights and protections (Isin 2009), we argue that the ability to handle debts forms a marker of participation in society, enabling the imposition of both moral and legal sanctions, delimiting who is (un)deserving and who should be given voice. We examine how a ‘successful’ individual can be constructed through the ‘proper’ engagement with finance and management of debt while others who struggle can be excluded from the access to rights and/or protection. Particularly, we focus on the ways these frames of deservingness and legitimization shape the ability of debtors to mobilise in case of perceived injustice and on their strategies of resistance.

Paper short abstract:

This paper explores relationships between middle-class formation, leveraged homeownership and public policies and narratives that fuelled privatization, commodification and financialization of housing in Croatia.

Paper long abstract:

This paper explores relationships between middle-class formation, leveraged homeownership and public policies that fuelled privatization, commodification and financialization of housing in Croatia. After privatizing nearly the entire public housing stock in the 1990s, the government has carried multiple mortgage subsidy schemes since the early 2000s. These programmes helped promote leveraged homeownership as a standard form of tenure and contributed to the major household debt and housing boom in the 2000s. The architecture and the public discourse surrounding the schemes dovetailed with and reinforced homeownership as a foundation of the hegemonic model of middle-classness and a form of tenure that is culturalized and naturalized as part of Croatian traditional values and way of life. Some schemes targeted and offered privileges to selected demographic and occupational groups. At the same time, these policies made homeownership dependent on debt in a context of poorly regulated mortgage and real estate markets. After the global financial crisis, the legacy of predatory and irregular practices combined with recession and a housing market bust and resulted in a spike in over-indebtedness, loan defaults and repossessions. Instead of serving as a basis for sustainable and inclusive middle-class formation, these processes made the attainment of dominant middle-class deals increasingly elusive, precarious and inequitable in practice. Some debtors responded by restating their middle-classness to demand public assistance while others came to question their class positions and the value of leveraged homeownership. While the hegemonic model of middle-class formation in Croatia has been politicized, counter-hegemonic projects failed to emerge.

Paper short abstract:

When a person with problem debt is unable to make genuine progress towards stability, they move toward symbolic and moral gestures which show they are taking their debt seriously. This paper outlines and discusses these gestures, which are used to resist narratives of financial/moral recklessness.

Paper long abstract:

All borrowing begins with a Utopian vision of the future. People borrow for a better life, to educate themselves, for a home, for a car, for their children. But though debt is taken on with noble intentions, the harshness of the world can make a mockery of our efforts.

Regardless of the reasons behind the fall into (over)indebtedness, this paper, based on research with Irish debtors answers a paradox: that debt problems ought to provoke a swift and immediate response as they only become more serious with time, yet people in debt persistently refuse to seek help. I explain this with reference to the shame-anger loop, whereby people become trapped in a toxic affective cycle of feeling ashamed that they cannot deal with their problems, then feeling angry that they are ashamed, which makes them feel more ashamed (and so on).

Nevertheless, people in debt feel compelled to try and do something, and so they make symbolic gestures. They pay a small amount (even €1) on a bill, they develop harsher budgets, they deprive themselves of cheap or even free forms of entertainment as a form of self-punishment, adopting the subjectivities of the responsible debtor. They strive to prove that they are still capable of managing their own affairs, but also that they are deserving of help and sympathy from others if the worst should happen. This is not financial bankruptcy - but rather moral or social bankruptcy, with its accompanying loss of respect, standing, and prestige in one's community.

Paper short abstract:

Debt governance consists of regulations that are implemented by debt advisers. They act as brokers of legal rules but they also need to break those rules if they want to help clients in the moral economy of bankruptcy. Interviews with debt advisers show the predicament of control and empowerment.

Paper long abstract:

Debt governance consists of legal rules and regulation that reach deep into the neoliberal constitution of the indebted self (Lazzarato 2012). Especially the process of discharge of residual debts imposes a number of financial and social constraints on debtors. Those constraints are implemented by debts advisers who guide debtors through the legal process of discharge. The advisors’ roles are manifold: they give juridical and economic advice, console and reprimand and help with budgeting and saving money. They understand their function not as teachers of thrift (Färber/Podkalicka 2019), but as guides helping to understand that changes in both house-holding and self-perception is needed on the way out of debts. In this role, debt advisers are bound to the legal framework of debt discharge, they have to act as brokers of the rules. At the same time, they also have to break those rules in their duty of empowering their clients and helping them to understand their agency. Legal regulations also collide with social relations which are vital when in debt. Just one example shows the predicament: The proceeding of debt discharges prescribes that all creditors are treated equally. Social expectations, however, suggest that one would pay back close relatives and friends before repaying the revenue board and telecommunications companies.

This paper analyses interviews with debt advisers and their view on debt governance, thus providing a perspective that is often missing in the analysis of the power structures inherent to debt relations.