Debtor

/ˈdɛtər/ noun

Definition

A person or entity that owes money to another party (the creditor). In corporate finance, this refers to companies that have borrowed money through loans, bonds, or other debt instruments and are obligated to repay.

Etymology

From Old French detour, from Latin debitor, from debere meaning 'to owe'. The root 'de-' means 'away from' and 'habere' means 'to have', literally meaning 'to have away from' or be without something owed to another.

Kelly Says

In bankruptcy law, being a debtor isn't necessarily bad - Chapter 11 'debtor-in-possession' companies actually get special protections and can reject unfavorable contracts, sometimes emerging stronger than their competitors who didn't go through bankruptcy!

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