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Simple English definitions for legal terms

debtor and creditor

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A quick definition of debtor and creditor:

Debtor-creditor law is about what happens when someone owes money to someone else and can't pay it back. The person who owes the money is called the debtor, and the person who is owed the money is called the creditor. There are different types of creditors, like those who have a special right to get paid first, and those who don't. When someone owes money and can't pay it back, they might have to go through a process called bankruptcy. Creditors can try to get their money back by going to court or hiring someone to help them, but they have to follow certain rules so they don't do anything unfair or mean. Sometimes, if a creditor can't get their money back, they might take something that belongs to the debtor, like their car or their house, and sell it to get some of their money back. But if the debtor tries to hide their things so the creditor can't take them, that's not allowed.

A more thorough explanation:

Debtor-creditor law is about what happens when someone owes money to someone else and can't pay it back. The person who owes the money is called the debtor, and the person who is owed the money is called the creditor. This kind of law usually comes up when someone goes bankrupt.

There are three types of creditors:

  • Lien-creditors: These are creditors who have a legal right to take a piece of property if the debtor can't pay the debt. The property is sold, and the money is used to pay off the debt. For example, if someone takes out a loan to buy a car, the lender might have a lien on the car. If the borrower can't pay the loan, the lender can take the car and sell it to get their money back.
  • Priority creditors: These are creditors who have a legal right to be paid before other creditors. For example, if someone owes taxes to the government, the government has a priority right to be paid before other creditors.
  • Non-priority creditors: These are creditors who don't have a lien or a priority right. They are the last in line to be paid, and they might not get paid at all if there isn't enough money to go around.

If a debtor can't pay their debts, creditors can try to get their money back by going to court or hiring a debt collector. But there are rules about how they can do this. For example, they can't harass the debtor or take property that the debtor needs to live.

Here are some examples of how debtor-creditor law works:

  • Example 1: John borrows $10,000 from a bank to buy a car. The bank puts a lien on the car, which means that if John can't pay the loan, the bank can take the car and sell it to get their money back.
  • Example 2: Mary owes $5,000 in taxes to the government. The government has a priority right to be paid before other creditors. If Mary goes bankrupt, the government will be paid before any other creditors.
  • Example 3: Tom owes $1,000 to a credit card company. The credit card company hires a debt collector to try to get the money back. The debt collector can't harass Tom or take property that he needs to live.

These examples show how different types of creditors can try to get their money back if a debtor can't pay their debts. They also show that there are rules about how creditors can do this, to protect debtors from unfair treatment.

debtor | debtor in possession

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HopefullyInLawSchool
16:06
it means you will not be rejected today and may be accepted or WL in the future
Just got my Michigan rejection
BookwormBroker
16:10
same
RoaldDahl
16:10
@HopefullyInLawSchool: what if i already got rejected. does it mean anything
HopefullyInLawSchool
16:12
@RoaldDahl: Likely not however it could mean nothing
RoaldDahl
16:15
So if it means nothing does that mean something?
HopefullyInLawSchool
16:17
Possibly
RoaldDahl
16:26
Cool
RoaldDahl
16:26
thank you!!!! i hope it means something
pinkandblue
16:31
fart
IrishDinosaur
16:36
Mich R gang lesgooo
Did anyone else get that random get to know nova email?
HopefullyInLawSchool
17:21
Ya it was sent to all YM applicants
starfishies
17:37
Anyone get the NDLS email inviting you to apply for something even though they haven’t made a decision on your app yet
17:38
Better yet I got the email and I was rejected last month
starfishies
17:38
Wtf
starfishies
17:39
and the deadline is in like a week what is this
any cardozo movement?
BatmanBeyond
18:01
Sent a LOCI via portal, but I'm wondering if email would have gotten me a swifter response
BatmanBeyond
18:02
This whole hold/wait-list/reserve system is a headache
loci already?
BatmanBeyond
18:09
If the odds are like 1-2% I don't think it matters much by the numbers
12:11
I got the same NDLS email
OrangeThing
12:18
I think the user profiles are broken
19:29
Any word out of Notre Dame?
19:29
Only the invitation to apply for LSE
19:29
Anyone received a decision from NDLS?
19:50
when did u guys apply that just heard from umich? they havent even glanced at my app yet
0:30
how am i supposed to spy on people when profile links are broken?
Right. Broken links smh
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