Debtors and Creditors

Debtors and creditors are terms related to money owed in financial transactions. A debtor is an individual or organization that owes money to another party. This could be due to loans, credit purchases, or other obligations. Conversely, a creditor is the party to whom money is owed. Creditors provide the funds or goods with the agreement that they will be repaid later. This relationship is fundamental in finance, influencing everything from personal borrowing to corporate financing and economic health. Understanding the dynamic between debtors and creditors is essential for managing finances effectively.