debtor

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noun debt·or \ˈde-tər\

Updated on: 26 Jul 2017

Definition of debtor

1 : one guilty of neglect or violation of duty
2 : one who owes a debt

See debtor defined for English-language learners

See debtor defined for kids

Examples of debtor in a Sentence

The debtor agrees to pay the debt over a three-year period.

Recent Examples of debtor from the Web

Debtors looking to refinance with a lower interest rate can now turn only to the private market since the federal government doesn’t issue refinancing.

— roger yu, USA TODAY, "Proposals to change student loan rules could upend industry", 5 July 2017
One of his more celebrated essays recounted his monthlong stay in debtor’s prison.

— dwight garner, New York Times, "The Wild of Nadar, an Early Photographer Who Knew How to Give a Party", 4 July 2017
Cecil is now the program's third largest remaining debtor, according to the Treasury's June report on the program to Congress.

— sarah gantz, baltimoresun.com, "Cecil Bank plans to recapitalize through bankruptcy sale", 3 July 2017
Those loan servicers are failing to help debtors struggling to make their payments, driving them into the arms of dishonest companies, critics say.

— Washington Post, "Feds point fingers as ‘debt relief’ cos. prey on students", 14 June 2017
DRA is known for making major improvements to its properties to increase their values for future sales, says Bradley Shraiberg, the bankruptcy attorney for the debtor.

— paul owers, Sun-Sentinel.com, "Publix-anchored Fountains of Boynton center sold for $47.3 million", 2 June 2017
In fact, the feds project that just 53 percent of debtors who’d enroll in these plans in the 2018 fiscal year would receive any forgiveness at all, according to estimates made public on Wednesday.

— the washington post, The Denver Post, "Counting on student loan forgiveness? Don’t bet on it", 28 May 2017
In fact, the feds project that just 53 percent of debtors who’d enroll in these plans in the 2018 fiscal year would receive any forgiveness at all, according to estimates made public on Wednesday.

— shahien nasiripour, Bloomberg.com, "Counting on Student Loan Forgiveness? Don't Bet on It", 25 May 2017
Yet his father fell on hard times, went to debtor's prison when Lee was 2 years old and later fled for the West Indies.

— NOLA.com, "Robert E. Lee: A brief history of the general atop the Confederate monument", 18 May 2017

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'debtor'. Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of debtor

13th century

Financial Definition of DEBTOR

debtor

noun

What It Is

A debtor is a person or entity legally required to provide a payment, service or other benefit to another person or entity (the obligee). Debtors are often also called borrowers or obligors in contracts.

How It Works

Companies that issue bonds are perhaps the most well-known debtors. They must provide their bondholders with set interest and principal payments on specified dates and in some cases must be willing to convert that debt into equity at specified ratios or repay the debt early if certain events occur.

However, a debtor also might be required to perform particular tasks or even refrain from performing certain actions. When a debtor fails to meet its obligations, the debtor is sometimes considered in default.

Why It Matters

Debtors are subject to contractual obligations. As such, if they do not fulfill their obligations, the creditors usually have the right to seek recourse in court. A significant amount of reputational damage can also occur when an entity, especially a public company, fails to meet its obligations. In some cases, even the speculation that a debtor might not fulfill its obligations can cause its stock price to go down and make it very difficult to obtain financing or other help later.

Source: Investing Answers