Paper Short Abstract:

Financial documents shape creditor-debtor relationships by acting as communicative devices, distributing both information and ignorance. This study, based on ethnographic fieldwork in Hungary, explores how debt collectors and bailiffs create incomplete and obfuscated documents, fostering information asymmetries and strategic ignorance to hinder debtors’ contestation and ability to reduce indebtedness.

Paper Abstract:

Creditor-debtor relationships are primarily financial situations grounded in contractual obligations and legal mechanisms shaped by particular legal and economic circumstances (Riles, 2011). Written contracts and other financial documents serve as the threads connecting finance and society, binding creditors and debtors (Weiss, 2020). Beyond their role as financial-legal artefacts, these documents act as communicative devices that shape the social and economic dynamics between debtors and creditors (Polletta and Tufail, 2014; Deville, 2015). This paper argues that financial documents not only distribute information but also propagate ignorance, influencing particular creditor-debtor relationships in over-indebtedness and default through shaping repayment conditions of specific contractual obligations. It highlights how inequalities in finance arise from the creation of financial documents, leading to information asymmetries (Leland and Pyle, 1977) and strategic ignorance (McGoey, 2012). Drawing on twelve months of ethnographic fieldwork conducted in 2021/22 in Budapest and Northern Hungary, this study focuses on debt encounters in Hungary, including debt collection, enforcement, and debt advice. It reveals how various actors utilize information asymmetries to foster uncertainty and ignorance among debtors by creating and using incomplete and illegible financial documents. Through a detailed analysis of debt collection and enforcement documents—such as collection/enforcement records and acknowledgements of time-barred debt—the paper outlines common strategies employed by debt collectors and bailiffs. These tactics, including delay, omission, and concealment, generate information asymmetries and strategic ignorance to hinder debtors’ contestation and ability to reduce indebtedness.