Final answer:
When an individual cannot pay their debt, they may go through processes like bankruptcy or debt restructuring. Historically, inability to repay debt has led to property seizures and calls for stay laws. Governments face similar issues with borrowing and investor confidence on a larger scale.
Step-by-step explanation:
When a person can no longer afford to pay back their debt, a number of outcomes can occur based on individual situations and legal jurisdictions. They may face foreclosure on their property, bankruptcy proceedings, or have their debts restructured. During historical events, such as during the panic of 1819 or the collapse of an economy, debtors may find themselves in dire circumstances, with increased bankruptcies, property seizures, and foreclosures. In some cases, stay laws provided debtors with more time to repay their creditors, while others called for the abolition of debtor's prisons. Governments handling national debts can also face challenges, with investor confidence waning, leading to the inability to sell bonds or borrow money. This can lead to a restructuring of debt payments or defaults, affecting future borrowings.