-
Debt
-
An amount of money due and payable, from one person to another.
The obligation to pay a certain amount of money to another person as a result of a contract or other legal obligation (such as damages resulting from a tort).
The obligation must be due for it to be a debt. Forthcoming rent, for example, is not yet a debt, nor are prospective damages not yet determined by judgment of a court. This distinction can be important as once a money obligation becomes due and payable (a debt), it may be exposed to garnishment.
A person with a debt to another is called a debtor. The person to whom the money is owed, his creditor.
A person who is "debt free" has no creditors; owes money to no other person.
A debt can be guaranteed or secured by a guarantee, indemnity or mortgage.
A debt is canceled by payment of the full amount owing to the creditor.
CATEGORIES AND TOPICS:
This term applies to the following areas of law and categories;