Paper short abstract:

This paper explores indebted households' attempts to improve their financial livelihoods by contesting their debts through legal procedures. The contestation of creditor-debtor relations involves the formation of new asymmetrical and conflicting dependent relations with legal representatives.

Paper long abstract:

Since the 20th century, the discipline of anthropology has developed a rich body of literature on credit/debt, indebtedness, and the unequal power relations between creditors and debtors, often with an explicit focus on the moral and temporal dimensions (see e.g., Graeber 2011; Kar 2019; Peebles 2010). Apart from notable exceptions (see e.g., Bear 2015; Riles 2011; Stout 2019) insufficient scholarly attention has been given to the role of (predatory) bureaucracy, (often complex/obfuscated) quasi-public institutional actors, and the socio-legal aspects of debt in which debtors are situated. Based on two mutually independent year-long ethnographic fieldworks in Poland and Hungary among urban middle-class households with FX loans and low-income households in default, respectively, this paper demonstrates that debts are adjustable, and they can be contested, and in cases even cancelled, through a plethora of legal procedures such as litigation, invoking (supra-) national legal frameworks, and debt negotiation. However, doing so often requires the formation of dependent relations with specialized profit-seeking legal actors who eagerly take advantage of asymmetrical relations and knowledge gaps of debtors . Financially precarious households, then, must navigate between various competing and conflicting dependent relations (i.e. debtor in relation to the creditor, lawyer, and debt collector) in order to improve their livelihoods.