What Debtors and Creditors?

Creditors are individuals/businesses that have lent funds to another company and are therefore owed money. By contrast, debtors are individuals/companies that have borrowed funds from a business and therefore owe money.

What 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.

Who are called debtors?

A debtor is a company or individual who owes money. If the debt is in the form of a loan from a financial institution, the debtor is referred to as a borrower, and if the debt is in the form of securities—such as bonds—the debtor is referred to as an issuer.