Debtor
Debtor
Debtor (/ˈdɛtər/) is a term used in the field of finance and law to refer to an individual, company, or any other entity that owes money to another party, known as the creditor. The term originates from the Old French word detour, which means 'one who owes', and has been in use since the 13th century.
Definition
A debtor is a person or entity that owes a debt or other monetary obligation to another party. The opposing party is typically a creditor, who provides a loan or other form of credit to the debtor. The debtor is legally obligated to repay the debt according to the terms of the agreement with the creditor.
Types of Debtors
There are several types of debtors, including:
- Consumer Debtor: An individual who owes money for personal, family, or household purposes.
- Corporate Debtor: A business entity that owes money to its creditors.
- Sovereign Debtor: A government that owes money to creditors, either domestic or foreign.
Legal Aspects
In legal terms, a debtor is obligated to repay the debt as per the agreement with the creditor. If the debtor fails to fulfill this obligation, the creditor has the right to take legal action, which may include filing a lawsuit, seizing assets, or forcing bankruptcy.
Related Terms
- Creditor: The party to whom the debtor owes money.
- Bankruptcy: A legal process in which a debtor who cannot pay their debts can seek relief from some or all of their debts.
- Insolvency: A financial state in which a debtor is unable to pay their debts when they are due.
External links
- Medical encyclopedia article on Debtor
- Wikipedia's article - Debtor
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