Debtor Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Debtor, written in plain English, along with examples of how it is used.
What is Debtor?
A person or company owing debt is a debtor. In legal proceedings the party declaring bankruptcy is the debtor.
History and Meaning of Debtor
The term "debtor" originates from the Latin word "debitore," which means someone who owes a debt. In the legal sense, a debtor refers to a person, business or organization that owes money to a creditor. A debtor can owe a debt for various reasons, such as borrowing money to finance business operations, obtaining a loan for personal or consumer reasons, or any other form of debt purchasing.
Debtors are subject to certain legal obligations and protections, depending on the laws of their jurisdiction. Failing to fulfill the terms of the debt or loan agreement can result in legal action being taken against them, including lawsuits, asset seizure or wage garnishment.
Examples of Debtor
- A person who takes out a loan from the bank to buy a car is a debtor.
- A company that has borrowed money from investors is a debtor.
- A person who owes money for unpaid bills, such as credit cards or utility bills, is a debtor.
- A country or government that has borrowed money from other countries or organizations is also considered a debtor.
- A person who has filed for bankruptcy is referred to as a debtor in all legal proceedings.
Legal Terms Similar to Debtor
- Creditor: The opposite of a debtor, a creditor is a person or entity that loans money or extends credit to another party.
- Securities: financial instruments used to raise capital, such as stocks, bonds, or other types of investment vehicles
- Insolvency: refers to a person or company's inability to pay debts as they come due.
- Default: When a debtor fails to meet the terms and conditions of a debt or loan agreement, they are considered in default.
- Bankruptcy: A legal status for individuals and businesses who cannot pay their debts and seek protection from creditors.