Debtor

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Debtor

In economics

Economics

File:Ballard Farmers' Market - vegetables.jpgEconomics is the Social sciences that studies the Production theory basics, Distribution , and Consumption of Good and Service ....
a debtor is simply an entity that owes a debt

Debt

Debt is that which is owed; usually referencing assets owed, but the term can cover other obligations. In the case of assets, debt is a means of using future purchasing power in the present before a summation has been earned....
to someone else, the entity could be an individual, a firm, a government, or an organization. The counterparty

Counterparty

A counterparty is a legal and financial term. It means a party to a contract. A counterparty is usually the entity with whom one negotiates on a given agreement, and the term can refer to either party or both, depending on context....
of this arrangement is called a creditor

Creditor

A creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or Service to the second party under the assumption that the second party will return an equivalent property or service....
. When the counterparty of this debt arrangement is a bank, the debtor is more often referred to as a borrower

Borrower

In finance, a Borrower is the party in a loan agreement which receives money or other instrument from a lender and promises to repay the lender in a specified time....
.

ult 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 loan covenant

Loan covenant

A loan covenant is a condition in a commercial loan or Bond issue that requires the borrower to fulfill certain conditions or which forbids the borrower from undertaking certain actions, or which possibly restricts certain activities to circumstances when other conditions are met....
(condition) of the debt contract.

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Encyclopedia

In economics

Economics

Debt

Counterparty

Creditor

Borrower

In finance, a Borrower is the party in a loan agreement which receives money or other instrument from a lender and promises to repay the lender in a specified time....
.

Default

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 loan covenant

Loan covenant

Debt

Debt is that which is owed; usually referencing assets owed, but the term can cover other obligations. In the case of assets, debt is a means of using future purchasing power in the present before a summation has been earned....
. This can occur with all debt obligations including bonds

Bond (finance)

In finance, a bond is a debt security , in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest and/or to repay the principal at a later date, termed Maturity ....
, mortgage

Mortgage loan

A mortgage loan is a loan secured by real property through the use of a note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which security interest the loan....
s, loan

Loan

A loan is a type of debt. This article focuses exclusively on monetary loans, although, in practice, any material object might be lent. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the wiktionary:lender and the wiktionary:borrower....
s, and promissory note

Promissory note

A promissory note, also referred to as a note payable in accounting, is a contract where one party makes an unconditional promise in writing to pay a sum of money to the other , either at a fixed or determinable future time or on demand of the payee, under specific terms....
s.

If the money owed becomes beyond the possibility of repayment, the debtor faces insolvency

Insolvency

Insolvency means the inability to pay one's debts as they fall due.This is defined in two different ways:Cash flow insolvency -: Unable to pay debts as they fall due....
or bankruptcy

Bankruptcy

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor in an effort to recoup a portion of what they are owed or initiate a restructuring....
; in the United Kingdom

United Kingdom

The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom , the UK or Britain,is a sovereign state located off the northwestern coast of continental Europe....
and some states of the United States

United States

The United States of America is a Federal government constitutional republic comprising U.S. state and a federal district. The country is situated mostly in central North America, where its Contiguous United States and Washington, D.C., the Capital districts and territories, lie between the Pacific Ocean and Atlantic Oceans, Borders of the U...
until the mid-19th century, debtors could be imprisoned in debtor's prison

Debtor's prison

DefinitionA prison for those who are unable to pay a debt...
s, while in some countries such as Greece

Greece

Greece , officially the Hellenic Republic , is a country in southeastern Europe, situated on the southern end of the Balkans. It has borders with Albania, Bulgaria and the former Yugoslav Republic of Macedonia to the north, and Turkey to the east....
the practice of imprisoning debtors is still practised.

Other uses

In the Latin version of the Lord's Prayer

Lord's Prayer

The Lord's Prayer, also known as the Our Father or Pater noster, is probably the best-known prayer in Christianity. On Easter Sunday 2007 it was estimated that 2 billion Catholic, Protestant and Eastern Orthodox Christians read, recited, or sang the short prayer in hundreds of languages in houses of worship of all shapes and size...
, 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

Substitutionary atonement

Substitutionary atonement is a doctrine in Christian theology which states that Jesus died – intentionally and willingly – on the Christian cross as a propitiation, or substitute, for sinners....
, which states that Jesus died on the cross as a propitiation, or substitute, for sinners.