Who is referred to as a creditor?

A creditor is defined as a party that is owed money. This often includes banks, financial institutions, or individuals who have lent money or provided goods or services on credit with the expectation of being paid back. When someone borrows money, the lender becomes the creditor, and the borrower assumes the role of the debtor. The relationship between a creditor and a debtor is fundamental in finance, as it governs transactions that involve loans and credit.

Understanding this relationship is crucial for anyone studying economics and personal finance, as managing debts and understanding who is owed money is integral to financial health. The positions of other options, such as a person declaring bankruptcy or a financial advisor, do not pertain to the concept of a creditor, as they either represent a status of financial difficulty or an advisory role, respectively.