Creditor
'kredɪtər
Definitions
A person or institution to whom money is owed, particularly in a business or financial context.
'kredɪtər
A person or company to whom money is owed.
The creditor demanded immediate repayment of the loan.
💡 Simply: Imagine you borrowed money from your friend. Your friend is now the creditor because you owe them money.
👶 For kids: A creditor is someone who is waiting to get money back that they lent to someone else.
More Examples
The company had to negotiate with its creditors to avoid bankruptcy.
Banks often act as creditors for businesses.
If you don't pay your bills on time, your creditors might take action.
How It's Used
"The company notified its creditors of its impending bankruptcy."
"The creditor filed a claim against the debtor's assets."
Idioms & expressions
secured creditor
A creditor whose claim is backed by a security interest in certain assets of the debtor.
"A secured creditor has priority over unsecured creditors in the event of a bankruptcy."
unsecured creditor
A creditor whose claim is not backed by any security interest or collateral.
"Unsecured creditors are usually last in line to get paid during a bankruptcy."
From Latin creditor, from creditum, past participle of credere ('to trust, believe'). The term has been used since the 14th century, initially referring to someone who grants credit or lends money.
The term 'creditor' has been used in legal and financial contexts for centuries, reflecting the fundamental relationship of lending and borrowing in society.
Memory tip
Think of 'credit' and the person who gave it - the creditor.