What is an example of a debtor?
‘Debtor’ refers not only to a goods and services client but also to someone who borrowed money from a bank or lender. For example, if you take a loan to buy your house, then you are a debtor in the sense of borrower, while the bank holding your mortgage is considered to be the creditor.
What is a simple definition of creditor?
Definition of creditor : one to whom a debt is owed especially : a person to whom money or goods are due.
Who is debtor and creditor with example?
For example, if you have borrowed money from a bank to buy a house or study abroad, you are a debtor. The bank is the creditor as it has loaned the money. Other examples of debtors include businesses and governments that borrow funds to meet their financial requirements.
Is a customer a debtor?
Generally speaking, a debtor is a customer who has purchased a good or service and therefore owes the supplier payment in return. Therefore, on a fundamental level, almost all companies and people will be debtors at one time or another. For accounting purposes, customers/suppliers are referred to as debtors/creditors.
Is a bank a creditor?
In many cases, a creditor is a bank or other financial institution, such as a credit union. Vendors and suppliers also can be creditors if they allow customers to buy things on credit. Creditors can be either secured or unsecured creditors, depending on the nature of the loan or credit extended to the borrower.
What’s a creditor and debtor?
A creditor is an entity, company or person that has provided goods, services or a monetary loan to a debtor. A debtor is the opposite of a creditor – it refers to the person or entity who owes money.
Is a bank a creditor or debtor?
A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. If X puts money in the bank, X is the creditor and the bank is the debtor. It is not a crime to fail to pay a debt.
Who is called creditor?
A creditor is an entity, company or person that has provided goods, services or a monetary loan to a debtor. A term used in accounting, ‘creditor’ refers to the party that has delivered a product, service or loan, and is owed money by one or more debtors.