No crime is committed if we fail to pay back money that we have borrowed

Very often we use the word 'loan' to describe two types of contract which are slightly different; we have the conventional loan which concerns the transfer of a physical object (specific) for use over a limited period of time but then there is a different arrangement whereby a specific quantity of a commodity (generic) is transferred with repayment expected at a later date, possibly with interest. An example of the former might be to lend a vehicle, or tool for use over a period of days, the latter would be to loan to a neighbour a cup of sugar or a can of oil, expecting repayment (in kind) some time later. In one case we expect to get back exactly the object which has been provided, not in the case of a generic loan.

In the case of a specific loan, ownership of the object is not transferred to the borrower, the lender merely agrees not to contest ownership for a period of time. At the end of the loan the original owner is free to reclaim the object and if there is interference from the borrower, they are violating the rights of the lender, which would be criminal, assuming the loan contract is valid. For a generic loan the ownership of the issued materials is not contested, it has passed to the borrower and repayment in kind only is expected and there is nothing for the loaner to reclaim. Whilst it is preferable for the borrower to do their best to return the borrowed items, in this scenario, they are not retaining any physical property and subsequently they are not committing a crime (only breaking a contract) if they fail to repay the debt.

Only if the borrower is preventing the original lender from reclaiming their property do they commit a crime for not repaying the debt, otherwise they have not done anything criminal. It is not criminal to break a contract. If the debt is generic we suffer only a loss of reputation in not making repayments, no crime has been committed against the lender.