In many ancient Mediterranean societies, if a debtor couldn’t pay his debts, he was bound to become the creditor’s slave. In Athens around 600 BC so many debtors had been bonded into slavery for this reason that the practice of debt bondage was banned.

Under the early Roman Republic, a person could pledge himself (or a family member) as collat-eral for a loan, in a type of contract called “nexum”. If the debtor failed to pay, then he or the unfortunate family member was liable to become the creditor’s slave. This practice was outlawed in 326 BC.

During Europe’s Middle Ages, debtors, both men and women, were locked up together in “debtors prisons” until their families paid their debt. Conditions were harsh and many debt prisoners died of diseases or starvation. If a father was imprisoned for debt, the family busi-ness often suffered while the mother and chil-dren fell into poverty. One of London’s most famous prisons was the Clink prison, which had a debtor’s entrance in Stoney Street. This prison gave rise to the slang term for being incarcer-ated in prison, hence “in the clink”. Its location also gave rise to the term “stoney broke” for being financially embarrassed.