Legacy debt refers to a type of long-term debt that is inherited from an earlier period or generation. This term often used in relation to government, businesses or organizations that have taken on large amounts of debt and are now struggling to pay it off. The debt may be the result of previous financial decisions made by those who are no longer involved, but the consequences of their actions remain. In some cases, legacy debt can weigh heavily on an organization's finances and limit its ability to make new investments or grow in other ways.