Who is the Creditor? Who is the Debtor?
A California bankruptcy attorney defines the role of the creditor and debtor in a bankruptcy process.
Someone who is new to the field of consumer law may not be sure who the creditor and debtor is in a financial dispute. The terms are easy to sort out so a reader should not panic if he or she does not realize what they mean right away. The difference is the direction the money should be flowing, and in many cases, it is the direction is flowing.
Creditor and Debtor – What Each Term Means
The debtor is the person who owes money. In a bankruptcy case, the debtor will usually be the one filing the claim unless it is involuntary bankruptcy. Debtors who get into deep trouble may look for some way to solve their situation.
The creditor is the person whom the money is owed to. If the debtor has received harassing phone calls from collection agencies, he or she can be sure that the original creditor initiated the service. The important thing to remember is that a debtor only has to pay the person to whom the debt is owed. Collection agencies can be cut out entirely in most circumstances, although local and county governments generally make sure that a person must deal with collection agencies for tax purposes
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