In this contribution, I introduce the concept of a “debtor society” and explore how it reflects broader socio-economic transformations shaped by neoliberal policies and financialisation. Building on Pistor’s (2019) argument that capital is coded in law, I argue that the debtor society is defined by two key elements: the normalisation of indebtedness as a central feature of life and the deliberate regulatory imbalances that exacerbate the asymmetry between creditors and debtors (Stănescu 2025, forthcoming).* While the rights of creditors and the mechanisms for debt collection are harmonised, simplified and efficient, consumer debtors face fragmented, complex, and inadequate legal remedies. This imbalance is most evident in the regulation of informal debt collection, as exemplified by EU Directive 2021/2167 on credit servicers and purchasers (CSCPD) and the Consumer Credit Directives (CCD) from 1987, 2008, and 2023.
Defining the Debtor Society
I use the term ‘debtor society’ to describe a socio-economic structure in which indebtedness is normalised and woven into the fabric of daily life, with profound societal implications. Debt, once a tool for financing economic growth, has become a life-shaping force in a world fraught with climate emergencies, pandemics, wars, inflation, and soaring interest rates. Citizens are now ‘governed by debt’, as Lazzarato (2012) aptly put it. They are no longer primarily seen as workers or consumers but as debtors—individuals whose value is measured by their ability to meet financial obligations.
This shift was facilitated by the ease of credit, rising living costs, stagnating wages, and a legal and regulatory framework prioritising creditor protection. While Keynesian economics once suggested that public debt could be deferred in the pursuit of social progress, neoliberal policies over the past few decades have shifted the burden from collective entities like governments to individuals (Ellis 2014). The commodification of personal debt, driven by financial institutions, has exacerbated this transformation. In 2022, for example, the nominal value of debt traded on secondary markets across less than half of EU member states amounted to three times the EU budget (Stănescu 2025, forthcoming).*
Debt Commodification: A Tool for Exploitation
At its core, the financial system serves an oligarchy (creditors) at the expense of consumers (debtors) (Yokoyama, 2021). New legal instruments are being developed to enable them to mitigate risks while continuing to pursue profit and (new) credit creation.
For instance, the commodification of debt allows financiers to add to their wealth extraction mechanisms the possibility of speculation on defaulted debt. They purchase debt from original creditors for a fraction of its face value but can collect the entirety of the amount. This speculative practice is encouraged and codified in law. The most recent example is the CSCPD, which fosters the creation of EU secondary markets for traded debts via simplified and harmonised procedures that are not equally matched by protection measures against abusive debt collection (Stănescu, 2023). On the contrary, implementing protection measures is left to the Member States, likely leading to a more fragmented and complex legal framework for consumers.
Debt commodification, especially the practice of selling portfolios of non-performing loans on secondary markets, makes little economic sense from certain perspectives, given the fundamental mismatch between the price of the debt (market value) and its recovery potential (nominal value). Since commodified debts are sold at significant discounts, the original creditor is essentially writing off a substantial portion of the debt, raising the question of why financial institutions continue to engage in such practices that result in considerable loss. Yet, the practice continues to be encouraged, for it is profitable for certain actors in the financial system – particularly debt buyers and debt collectors – and enables creditors to shift the risk of non-payment, free provisions and continue lending.
However, seen from a long-term economic stability and social well-being standpoint, debt commodification creates more problems than it solves. Debt purchasers assume the risk of not being able to collect. Since their investment is based on the hope of recovering more than the discounted price paid, they face diminishing returns and must invest in costly and often ethically questionable collection practices. This, in turn, leads to further financial instability and distress for consumers, who face predatory and aggressive collection tactics. The result is an erosion of trust in financial institutions and a deprecation of consumer financial health, with negative consequences for consumer well-being and overall economic growth. Moreover, debt commodification disproportionately affects low-income and vulnerable individuals who are more likely to default, which can result in broader social costs: increased poverty, psychological distress and social inequalities.
Conversely, legislative proposals and attempts to enable debtors to liberate themselves from debt peonage by repaying the same price paid to their original creditors by debt buyers are dismissed as immoral, further illustrating the system’s inherent unfairness. Even the EU’s calls for ‘responsible financing’ fall short in this context. The systemic consequence of debt sales is creditors minimising their risk exposure by transferring it to the secondary market. This raises moral hazard concerns, as creditors are less incentivised to assess borrowers’ creditworthiness adequately and ensure sustainable lending practices.
From Keynes to Neoliberalism: A Shift in Responsibility
Keynes did not foresee the shift in responsibility from governments to individuals (Ellis 2014) or the mechanisms that financial institutions would develop to commodify debt on a massive scale (Stănescu 2025, forthcoming). In the aftermath of the 2008 financial crisis, individuals—not institutions—were held responsible for the economic collapse, a narrative that shielded financiers and policymakers from scrutiny. Alongside corporate greed, consumer self-indulgence and irresponsible behaviour were also blamed for the subprime mortgage crisis, deflecting attention from the underlying structural flaws in the financial system.
Before 2008, consumers were portrayed as the beneficiaries of an over-leveraged economy. The promise of easy credit offered the allure of the “capitalist good life,” in line with Galbraith’s concept of the affluent society . Credit was promoted as a tool to lift the global poor out of poverty, with little concern for the long-term consequences of debt accumulation. However, when the bubble burst, consumers were left to bear the brunt of austerity measures, reduced public services, and heightened financial stress (Lazzarato, 2015).
Regulatory Imbalances and the Codification of Capital
A critical feature of the debtor society is the asymmetry in the relationship between debtors and creditors, an imbalance that has only grown since the 2008 financial crisis. While debtors grapple with meeting their basic needs, the creditors benefit from their extensive global market connections and influence over regulators, minimising risk exposure 2021. The emergence of digital financial products like Buy Now Pay Later (BNPLs) schemes has only exacerbated this issue, with high fees for missed payments and weak consumer protections leading many into unmanageable debt that ends up on the secondary debt markets.
The 2023 CCD expands the scope of regulation to include previously excluded financial products like small loans and BNPLs. However, this expansion is tempered by provisions allowing a milder regulatory regime in cases deemed to place an undue burden on creditors (Recital 36), highlighting the persistent imbalance in favour of creditors. Creditors can also challenge consumers’ right to withdraw from agreements on the grounds of bad faith (Recital 56), further tilting the scales.
Conclusion
The debtor society represents the culmination of decades of neoliberal policies that have shifted the debt burden from collective entities to individuals. In this society, debt is normalised and commodified. Simple and harmonised procedures help financiers codify debt trading and recovery into law. At the same time, consumers are left to navigate a fragmented legal landscape that offers little protection against the predatory practices of creditors and debt buyers.
As consumer debt continues to mount, private and consumer law must evolve to address the realities of the new economic order. Reforms should prioritise debtors’ needs, offering them the protections and remedies they need to escape the cycle of perpetual debt. Only by addressing the structural imbalances inherent in the current system can one hope to create a more equitable society where debt is no longer a tool of exploitation but a means of social progress.
* I am discussing these matters at length in my forthcoming monograph: EU Informal Debt-Collection Regulation: Failure by Design, OUP, 2025
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