debtor

A debtor is a person or organization that owes money or performance to another party under a debt obligation. The debtor may be an individual, a corporation, a partnership, a government entity, or another type of organization. The term is used in finance, contract law, and bankruptcy to identify the party that owes a debt, as distinct from the creditor, who is owed the obligation, and from the borrower, who obtained funds or goods that created the debt.

Debts arise from loans, credit transactions, service obligations, or statutory liabilities such as taxes. Debts can be secured, backed by collateral (for example, a mortgage or car loan), or unsecured. The debtor’s obligation typically is to repay the principal and interest, and any agreed fees, by specified dates. If payments are not made on time, the account may go into default, enabling remedies under contract or law.

Debtor rights and protections vary by jurisdiction but commonly include the right to be informed of the debt, to dispute or verify charges, and to seek reasonable accommodations for disputes. Debt collection is regulated in many countries to prevent harassment and fraud. In insolvency situations, debtor protections may include automatic stays, restrictions on creditors, and the possible discharge of debts through bankruptcy or insolvency proceedings.

Enforcement of debts may involve collection efforts, wage garnishment, liens, asset seizure, foreclosure or repossession for secured debts, and impacts on credit ratings. Debtor status is a descriptive term reflecting a financial obligation and does not imply a moral judgment; its precise meaning can vary with legal context and jurisdiction.