Warning

Info

Warning

Info

Warning

Info

LSDefine

Simple English definitions for legal terms

debtor and creditor

Read a random definition: good and valuable consideration

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

Warning

Info

General

General chat about the legal profession.
main_chatroom
👍 Chat vibe: 0 👎
Help us make LSD better!
Tell us what's important to you
19:42
it was hard to not improve it. google search was terrible due to the ads and seo cheaters with buzz words and alt text
Dkk
19:42
SEO is big money
2016 pushed the conservative party into populism irreversibly
Dkk
19:43
Maybe, but if this is populism, then every election is populist.
19:43
@Dkk: yeah register 1 website and every swinging tom dick and harry calls/emails/texts to 'help with seo'. like bruh, if YOU found it, what i am doing is working
Dkk
19:43
Indeed!
19:48
wasp, i think people are hopeful for a gov who at least attempts to care about the common man
MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
LSD+ is ad-free, with DMs, discounts, case briefs & more.