creditor

Creditor

A person (or institution) who extends credit by giving permission to borrow money if he or she promises to pay it back at a later date. Creditors can be classified into either personal or real. Those who have lent money to friends or family are personal creditors. Real creditors (i.e. a bank or finance company) have legal contracts with the borrower granting the lender the right to claim any of the debtor's real assets (e.g. real estate or car) if he or she fails to pay back the loan.

Notes:

When creditors are notified of bankruptcy proceedings, there are a couple of options with respect to their claim against the debtor:

1. They can share in any distribution from the bankruptcy estate according to the priority of their claim. Most unsecured, non-wage claims come low on the priority list.

2. Take the debtor to court and challenge a debtor's discharge (the right not to pay back) due to bankruptcy protection.

See also: Bank, Bankruptcy, Chapter 11, Chapter 7, Credit, Discharge in Bankruptcy, Loan, Mortgage, Unsecured Creditor, Writ of Seizure and Sale

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Creditor

Lender of money.

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creditor

One to whom funds are owed. Holders of bonds and debentures are creditors to whom funds are owed by the issuers. Compare debtor. See also secured creditor, unsecured creditor.