Who is considered a creditor?

A creditor is defined as an individual or entity that is owed money. This typically includes banks, financial institutions, or any other party that has extended credit or provided a loan to a debtor. In the context of bankruptcy, creditors are significant because they have a financial stake in the proceedings to recover any amounts owed to them by the debtor who has filed for bankruptcy.

The entity owed money before a bankruptcy filing qualifies as a creditor because they have a legal right to seek repayment from the debtor. This status is critical during bankruptcy proceedings, as it determines how claims are treated and prioritized. Thus, understanding the role of a creditor helps in grasping the broader implications of financial responsibilities and legal definitions related to debt collections and bankruptcy processes.