What Do “Debtor” and “Creditor” Mean?

Debtor or creditor are words you have probably heard before, but you might not be sure what they mean. They describe a relationship where one party owes money to another party. The debtor is the party that owes the money (debt), while the creditor is the party that loaned the money. For example, if Jay loans Reva $100, Reva is the debtor and Jay is the creditor. One way to remember this is that the debtor is the party that owes the debt.

While we may borrow money in many contexts without thinking of ourselves as “debtors,” most of us are typically debtors in some situation. Many people use credit cards, making them the debtor to their credit card company.

When we use “debtor” and “creditor” in these contexts, it does not mean that the “debtor” is overdue on their bills. It also does not mean that the “creditor” is doing anything special to collect the borrowed money from the debtor. However, we continue to use the terms “debtor” and “creditor” when the debtor is behind on their payments and the creditor is taking special measures to collect money from the debtor.

If you are behind on your debts, know that there are rules about what people can do to collect money from you. The other articles in this section discuss some of those limits. Plenty of additional information is available on this area of the law, including from the Iowa Attorney General’s Office and from Iowa Legal Aid.