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A debtor is a person or entity that is owes money to another person or entity (the creditor). A debtor is said to be insolvent when unable to meet the obligations its debts. A debtor is said to bankrupt when declared insolvent by a court. The large established corporation is almost always a debtor by choice as sound financial management often dictates that some capital can be obtained less expensively by debt rather than equity. Any individual having mortgages, student loans, credit card balances, or other debts outstanding is a debtor. Even a government can be a debtor, too, by borrowing from other governments or from investors. The etymology of the word debtor can be traced back to the Latin verb meaning to owe. |
