Overindebtedness: meaning, definitions and examples
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overindebtedness
[ ˌoʊvərɪnˈdɛbtədnəs ]
financial situation
Overindebtedness refers to a state in which an individual or entity has accumulated excessive debt that they are unable to repay. This situation often leads to financial distress, bankruptcy, and can severely affect one's creditworthiness and overall financial health.
Synonyms
debt burden, excessive debt, overload
Examples of usage
- His overindebtedness led to a painful bankruptcy process.
- Many families face overindebtedness due to rising living costs.
- Overindebtedness can result in long-term financial instability.
Word origin
The term 'overindebtedness' originates from combining the prefix 'over-' with the word 'indebtedness.' The prefix 'over-' signifies an excess, while 'indebtedness' stems from the Old French 'endetté' and Latin 'indebitare,' meaning to owe or be in debt. The concept emerged prominently in financial discussions during the late 20th century as consumer borrowing dramatically increased, reflecting growing concerns about unsustainable debt levels among individuals and households. This condition highlights societal shifts towards credit usage and the implications of economic policies that promote consumer spending, often leading to a vicious cycle of borrowing when individuals exceed their ability to repay.