Definition of Debtor:
A person or institution that owes a sum of money.
A person who owes money.
A debtor is a company or individual who owes money. If the debt is in the form of a loan from a financial institution, the debtor is referred to as a borrower, and if the debt is in the form of securities – such as bonds – the debtor is referred to as an issuer. Legally, someone who files a voluntary petition to declare bankruptcy is also considered a debtor.
It is not a crime to fail to pay a debt. Except in certain bankruptcy situations, debtors can prioritize their debt repayments as they like, but if they fail to honor the terms of their debt, they may face fees and penalties as well as a drop in their credit scores. Additionally, the creditor may take the debtor to court over the matter. This lay lead to liens or encumbrances.
Synonyms of Debtor
How to use Debtor in a sentence?
- As the fledgling company sank further into financial ruin, its debtor status was very obvious by the fact that so many bills were behind it could barely keep on the lights.
- If you are a debtor it is best to pay off what you owe quickly so you dont have an adverse reaction to your credit score.
- Generally, debtors must negotiate with each creditor separately.
- If someone is a debtor to you it is important that you keep on them to pay you back but also dont step on their toes.
Meaning of Debtor & Debtor Definition