CREDITOR
An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and
receive money, either through the fulfillment of a
contract or due to injury sustained as a result of
another’s NEGLIGENCE or intentionally wrongful
act. The term creditor is also used to describe an
individual who is engaged in the business of lend-
ing money or selling items for which immediate
payment is not demanded but an obligation of
repayment exists as of a future date.
An attachment creditor is an individual who
has obtained an order of attachment from a
court to command a sheriff to seize the property
of a debtor who has defaulted in the repayment
of an outstanding obligation so that the prop-
erty may be used to satisfy the creditor’s claim.
A JUDGMENT CREDITOR is a party who has
gone to court and obtained a judgment against
the person who owes him or her money. If that
judgment creditor obtains an order of attach-
ment, he or she becomes an attachment creditor.
A general creditor or creditor at large is an
individual who has neither a lien nor a security
interest in the property of the debtor.
A junior creditor is one whose right to collect
money from a debtor is subordinate to that of
another individual who also has a right to collect
payment of a different debt from the same
debtor. The person with the primary right to
payment is known as a senior creditor.
A principal creditor is the party who has a
claim against the debtor that is far greater than
the debt owed to any other creditor, and in some
instances, to all other creditors combined.
A secured creditor holds a special legal right
in particular property of the debtor to assure
him or her of repayment of the debt. A creditor
who has the protection of a lien or mortgage is
secured.
A single creditor has a lien on only one of the
debtor’s funds or accounts.
Petitioning creditors are those parties to
whom one debtor owes money and who apply to
the court of BANKRUPTCY in order to secure the
debtor’s property and distribute it equitably
among them.
