Respectively, a person who owes a debt and a person to whom the debt is owed. Usually the debtor has received something from the creditor, in return for which the debtor has promised to make repayment at a later time. If the debtor fails to repay by the deadline, a formal collection process may commence. It is sometimes possible to attach the debtor's property, wages, or bank account as a means of forcing payment. Imprisonment of the debtor is a practice no longer followed. Seealso garnishment, lien.
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The term creditor is frequently used in the financial world, especially in reference to short term loans, long term bonds, and mortgages. In law, a person who has a money judgment entered in their favor by a court is called a judgement creditor.
The term creditor derives from the notion of credit. In modern America, credit refers to a rating which indicates the likelihood a borrower will pay back his or her loan. In earlier times, credit also referred to reputation or trustworthiness.
In accounting presentation, creditors are to be broken down into 'amounts falling due within one year' or 'amounts falling due after more than one year'...
The financial statements presentation is this:
Creditors want cash, but many must settle for stock; most big Chap. 11 plans now contain issuance of shares to unsecured creditors. (Chapter 11 bankruptcy reorganization plans)
Dec 16, 1992; NEW YORK (FNS) -- As debtors continue to have difficulties lining up post-reorganization funding, the issuance of stock to settle...