A party to whom money is owed.

Common classifications of a creditor include (1) Secured: who has a legal right to take a specific property of the borrower and sell it in case of a default. (2) Unsecured: who does not have any such right. (3) Preferential or senior: who takes precedence over other creditors in laying claim to a bankrupt borrower's property. (4) Junior: whose claim is addressed after satisfying the claims of preferential or senior creditors.

Use creditor in a sentence

  • Once you graduate or otherwise exit university, be sure to contact your creditor right away to make arrangements to pay back your student loans.

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  • The creditor submitted the claim and it would be up to the trustee to determine who gets paid what as the estate is small.

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  • Although Peter could no longer pay his creditor, he was at least somewhat relieved that they could not lay claim to his house as his debt was unsecured, based on his credit rating as opposed to any of his assets.

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