What does Debtor mean?
In the bankruptcy process, a debtor is a person or entity who has filed a petition for relief under the Bankruptcy Code. In general terms, a debtor is any person or entity who owes another person or entity a monetary debt or service not yet paid. A debtor can be an individual, business, or a governing body.
In the bankruptcy process, bankruptcy laws determine how a debtor is to repay any debt incurred belonging to the bankruptcy estate. Under certain types of bankruptcies, a debtor may have a debt discharged from obligation by the bankruptcy proceedings. All other debts not discharged will either be paid in full or in part.
A debtor, who is unable to pay their debt, whether in the bankruptcy process or prior to filing bankruptcy, is said to be insolvent or bankrupt. Not all debtors should file bankruptcy. Because bankruptcy does not discharge all unsecured debts and does not discharge any secured debts, it is important to understand your debt obligations and what financial solution is best for you. Talk to a bankruptcy lawyer if you have questions about your debts.