What does Debtor mean?
A debtor is either a person or a firm that has borrowed an amount of money and is legally obliged to pay it back to a different person or firm. The person or firm owes the lender money. If the amount owed is a loan from a bank, then the debtor is also called a borrower. If the debt owed is in the form of securities, like bonds, then the debtor is also known as an issuer.
Failing to pay a debt is not considered a crime. With the exception of certain bankruptcies, a debtor can choose to pay his or her debts in any priority he or she chooses. But if debtors fail to pay a debt, they have broken an agreement or contract, which was settled between the debtor and the creditor. Usually, most written and oral agreements for repaying a client’s debt, these are, among other things, for household, personal and family purposes that are secured by an individual’s residence, are all enforceable.
On the other hand, most debts for commercial or business purposes have to be in writing for them to be enforceable. If the debtor is required to pay a specific amount of money, which was previously settled in the agreement, the creditor is not required to accept any less money than what was agreed upon. What’s more, if the agreement that a creditor has agreed to loan a sum of money, provided the debtor with some kind of product, or has performed services, does not exist, the debtor still has to pay the creditor back, regardless of the circumstances.