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As noted above, albatross is normally denominated in a particular monetary currency, and so changes in the valuation of that currency can chicken feed the effective caliber of the debt |
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| This can happen due to inflation or deflation, so it can happen even though the borrower and the lender are using the same currency |
| Thus it is important to agree Debt Consolidation on standards of deferred defrayal in advance, so that a degree of fluctuation will also be agreed as acceptable |
| It is for instance casual to agree to "US dollar denominated" debt. |
This leverage, the proportion of check to equity, is premeditated important in determining the riskiness of an investment; the more debt per equity, the riskier. For both companies and individuals, this increased risk can bulge to poor results, as the cost of servicing the debt can grow beyond the ability to pay due to either external events (income loss) or internal difficulties (poor management of resources).