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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Nirat.pix/Shutterstock March 29, 2022 Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. What is a debtor
A debtor is a person or business that owes money to another person or business. If you’re a debtor, you are indebted to someone else. Sometimes, a debtor refers to someone who files for bankruptcy. A borrower and debtor are nearly interchangeable terms. A borrower is in debt to a lender or financial institution when they borrow money. They usually complete applications and have legal obligations when borrowing money — in other words, if you take out a loan, you have a contractual obligation to pay it back. Example of a debtor
Debtors aren’t always individuals, but in many cases they are. Debtors are people or companies who have: Auto loans Business credit cards Credit cards Mortgages Personal loans Small business loans Student loans Why it matters
If you are a debtor, you have certain financial responsibilities. The type and amount of debt you have can affect your credit score, so it’s important that you’re aware of which debt you currently hold and which . What is the difference between a debtor and a creditor
While a debtor is someone who owes money to someone else, a creditor is a person or business they owe money to. You may hear a borrower referred to a debtor, since they are someone who takes on debt. A lender — the entity that lends money to a person or a business — is the creditor. Creditor, lender and issuer are usually interchangeable terms. What laws protect debtors
There is nothing wrong with being a debtor; people and companies borrow money from other companies all the time. They make payments according to their terms and many times repay their loan or credit card without cause for concern. But there are some instances where debtors can’t pay. If you can’t pay your debt, the debt will eventually be deemed delinquent, and if you don’t pay long enough, it can go into default. somewhere around 180 days of nonpayment. This is when your creditor sells your old debt to a third-party company for less than you owe and the new company starts contacting you in an effort to collect the old debt. While you may have already been contacted by debt collection agencies, you have protection against unlawful companies who try to get you to pay. The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) is a consumer law designed to protect you from . Under the FDCPA, debt collectors can’t contact you between 9 p.m. and 8 a.m., and they can’t contact you at work. But they can call, text and send emails or letters in an attempt to collect an outstanding debt. According to the law, they aren’t allowed to: Use harmful or obscene language. Threaten you with physical harm or jail time. Lie about the debt you owe or what happens to you if you don’t pay your debt. Statute of limitations
Debt collectors can continue making attempts to collect debt on both unsecured and secured debt until you’ve paid your debt in full. However, the on old debt means they only have a certain number of years to sue you for that old debt. If the debt is secured, you could also lose your collateral. For example, the lender could repossess your vehicle if you fall behind on payments. Another example is if your home could face foreclosure if you stop making mortgage payments. This usually happens after 120 days of non-payment on home loans. The statute of limitations varies by state and by the debt in question. You could if you acknowledge it or even make a partial payment on it. Final takeaways
Don’t be discouraged by the label of debtor. While debt tends to get a bad reputation, it simply means that a person or company owes money to another person or company. This is standard when talking about money in an official capacity. However, before you authorize an application or sign a contract, read the fine print so you know what you’re on the hook for in case you can’t make payments on your debt. Learn more
SHARE: Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Related Articles