A debtor is a person, physical or legal, who owes money to another person, known as a  creditor.

The debtor is obliged to make the payment to the creditor on a previously agreed date. If the debtor does not comply with the agreement, that is, with his obligation, the creditor can demand a real asset from the debtor as compensation. For example, a house or land.

Likewise, in the event that there is no document that justifies the debt, it is equally enforceable but legally the obligation does not exist. Therefore, the creditor may not take any legal action against the delinquent (debtor). Exceptionally, everything is indicated, the creditor could try to recover the debt by judicial means, but it is difficult for a judge to recognize the debt. Witnesses or other evidence not officially recognized but clarifying the case would be required. Such would be the situation with a debt in which the delinquent is a friend, relative or trustworthy person to whom money was lent.

Types of debtor

As with the figure of the creditor, there are many types of debtors. However, for practical purposes, since we collect in this link the types of debt (and hence debtors) we will distinguish debtors into three types:

  • Fortuitous or by force majeure:The fortuitous debtor by force majeure is one who cannot pay his creditor for unforeseeable and unavoidable acts. In these cases, you may be held without liability to the creditor.
  • Bad management:Due to ignorance or incompetence, they are unable to pay their debts to the creditor.
  • Negligence:They carry out fraudulent activities or, knowing that they will be harmed, to cause their own insolvency and thus not pay the creditor.
  • Own will:Refers to those debtors who decide, by their own will and despite having sufficient means, not paying their debt.

Generally, failure to pay a debt by the debtor is not a crime. When a debtor is bankrupt and must pay several debts, he may choose to pay the debts according to the priority he wishes, as long as the contrary has not been established in the contracts signed with the creditors. A clear example of the order of priority is given in fixed income debts You can see more information about this priority in debt types.

Debtor example

An example of a debtor due to force majeure would be one that is insolvent by a natural catastrophe. Consequently, you cannot make the corresponding payment. While you may still be obligated to pay, justice will not impose penalties. In addition, in these cases, given that insurance does not cover this type of event, governments provide aid in the form of subsidies and moratoriums on compensation.

Regarding bad management, it would be a manager who, due to his incompetence, makes a company go bankrupt. That is, because of his inability to handle the situation.

For its part, the negligent could be a department manager who performs activities to harm the company. And, because of you, the company is unable to meet its obligations.

Finally, the one who does it on his own will would be a person who does not pay someone for revenge or simply because he does not want to.

by Abdullah Sam
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