CAPS GET EMS 9 TERM 2 WEEK 2- 7 Credit transactions – Debtors

DEBTORS

A debtor is a person or entity that owes money. In other words, the debtor has a debt or legal obligation to pay an amount to another person or entity.

For example, if you borrow $10,000 from a bank, you are the debtor and the bank is the creditor.

Once he has paid the money back, he gets released from debt.

If a company or business borrows money it becomes a debtor as well.