Definition - What does Debtor mean?
A debtor refers to a person or entity that owes a debt (often monetary) to another person or entity, usually known as a creditor. However, when the creditor is a bank, the debtor is typically referred to as borrower.
Justipedia explains Debtor
A basic example of a debtor or borrower and creditor is as follows: Sam chooses to take out a loan from his bank. Sam is now a borrower, and the bank is his creditor. Sam is then required to pay back the money, typically done in increments over time. The bank (and many other creditors) will also charge a set fee, known as interest.
If a person or entity acquires too much debt and is unable to pay the amount back, then he or she will typically have to file for bankruptcy.
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