debtor

1. One that owes something to another.
2. One who is guilty of a trespass or sin; a sinner.

[Middle English dettour, from Old French dettor, from Latin dēbitor, from dēbitus, past participle of dēbēre, to owe. See debt.]

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. If the debt is in the form of securities, such as bonds, the debtor is referred to as an issuer.

Investopedia Says:
It is not a crime to fail to pay a debt. Except in certain bankruptcy situations, debtors can choose to pay debts in any priority they choose. But if you've failed to pay a debt, you have broken a contract or agreement between you and a creditor. Generally, most oral and written agreements for the repayment of consumer debt - debts for personal, family or household purposes secured primarily by a person's residence - are enforceable.

However, most debts for business or commercial purposes must be in writing to be enforceable. If the agreement requires the debtor to pay a certain amount of money, then the creditor does not have to accept a lesser amount. Also, if there was no actual agreement but the creditor has loaned money, performed services or provided the debtor with a product, that debtor must pay the creditor.

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Any individual or company that owes money. If debt is in the form of a loan from a financial institution, you might use borrower. If indebtedness is in the form of securities, such as bonds, you would refer to the issuer. See also Obligor.

Person obligated to repay a debt; opposite of Creditor.
Example: By buying a house with a mortgage loan, Cathy became a debtor.

Definition: borrower
Antonyms: creditor

One who owes a debt or the performance of an obligation to another, who is called the creditor; one who may be compelled to pay a claim or demand; anyone liable on a claim, whether due or to become due. In bankruptcy law, a person who files a voluntary petition or person against whom an involuntary petition is filed. A person or municipality concerning which a bankruptcy case has been commenced.

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A debtor is an entity that owes a debt to someone else. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterparts of this debt arrangement is a bank, the debtor is more often referred to as a borrower.

Contents 1 Default 2 Debtor in Bankruptcy and Individual Voluntary Arrangements 3 Other uses 4 See also 5 References 6 External links

Default

Main article: Default (finance)

Default occurs when the debtor has not met its legal obligations according to the debt contract, e.g.- it has not made a scheduled payment, or has violated a covenant in the debt contract. Default may occur if the debtor is either unwilling or unable to pay its debt. This can occur with all debt obligations including bonds, mortgages, loans, and promissory notes.

If the debt owed becomes beyond the possibility of repayment, the debtor faces insolvency or bankruptcy; in the United Kingdom and some states of the United States until the mid-19th century, debtors could be imprisoned in debtor's prisons, while in some countries such as Greece the practice of imprisoning debtors is still practiced.

Debtor in Bankruptcy and Individual Voluntary Arrangements

An Individual Voluntary Arrangement is a legally binding arrangement supervised by a licensed Insolvency Practitioner, the purpose of which is to enable an individual, sole trader or Partner ("the Debtor") to reach a compromise with his creditors and avoid the consequences of bankruptcy. The compromise should offer a larger repayment towards the creditor's debt than could otherwise be expected were the Debtor to be made bankrupt. This is often facilitated by the Debtor making contributions to the arrangement from his income over a designated period or from a third party contribution or other source that would not ordinarily be available to a Trustee in Bankruptcy

Other uses

In the Latin version of the Lord's Prayer, the words Et dimitte nobis debita nostra/Sicut et nos dimittimus debitoribus nostris, the words Debtor and Debt are sometimes translated as Sinner and Sin. This particular understanding of sin, as a form of debt that humanity inherits, is related to the soteriological theory of substitutionary atonement, which states that Jesus died on the cross as a propitiation, or substitute, for sinners.

See also

• Simplified Individual Voluntary Arrangement
• Bankruptcy
• Liquidation
• Administrations
• Administrative Receiverships
• Trust Deeds (only available in Scotland)

References

External links

• Insolvency Service website
• Insolvency Practitioners Association website
• Insolvency News

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