what is a debtor 
a debtor is a company or individual who owes money the debtor is referred to as a borrower when the debt is in the form of a loan from a financial institution and as an issuer if the debt is in the form of securities such as bonds someone who files a voluntary petition to declare bankruptcy is also considered a debtor investopedia theresa chiechipenalties for debtorsit s not a crime to fail to pay a debt debtors can prioritize their debt repayments as they like except in certain bankruptcy situations they may face fees and penalties as well as drops in their credit scores if they fail to honor the terms of their debt however a creditor may also take a debtor to court for failure to pay and this can lead to liens or encumbrances debtors can t be sent to jail for unpaid consumer debts but a court can send a debtor to jail for unpaid child support in some cases debtor vs creditorcreditors are the opposite of debtors they re institutions businesses or individuals that extend credit to debtors creditors can be persons or entities just like debtors they can also be companies that provide supplies a company acts as a creditor when it offers supplies or services and agrees to accept payment at a later time family or friends can also be considered creditors if they ve lent money they re personal creditors real creditors are banks or finance companies with legal contracts creditors make money off debtors by charging them fees or interest can debtors go to jail for unpaid debts debtors prisons were relatively common in the u s until the civil war era when most states started phasing them out debtors don t go to jail for unpaid consumer debt such as credit cards or medical bills in contemporary times the laws governing debt collection practices activities are included in the fair debt collection practices act fdcpa they forbid bill collectors from threatening debtors with jail time 1the court can send debtors to jail for unpaid child support in some cases child support arrears cases become a federal court issue when the amount owed exceeds 10 000 and or the payments are more than a year overdue this type of debt is otherwise handled by state and local courts 2there are some exceptions to this rule a debtor who has been ordered by the court to pay a debt and misses a payment can be held in contempt of court in some states and this can result in jail time and could indirectly send the person to jail for being a debtor 